Strategic and Tactical Product Launch Decisions and Performance of a New Artist within Music Industry

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UNIVERSITY OF VAASA FACULTY OF BUSINESS STUDIES DEPARTMENT OF MARKETING

Hans Timola Strategic and Tactical Product Launch Decisions and Performance of a New Artist within Music Industry

Master‟s thesis in Marketing International Business Program

VAASA 2011

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TABLE OF CONTENTS

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LIST OF FIGURES

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LIST OF TABLES

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ABSTRACT

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1. INTRODUCTION 1.1 The Background of the Study 1.2 Research Problems and Objectives 1.3 Scope and Limitations of the Study 1.4 Previous Studies and Characteristics of the Music Industry 1.5 Outline of the study

11 11 13 14 16 20

2. MARKET PERFORMANCE THROUGH STRATEGIC AND TACTICAL LAUNCH DECISIONS 22 2.1 Motives for Internationalization and Commercialization 22 2.1.1 Motives to internationalize 23 2.2.2 Motives to commercialize 24 2.2 Strategic Launch Decisions 2.2.1 Market analysis and goal setting 2.2.2 Product strategy 2.2.3 Market strategy 2.2.4 Competitive strategy 2.2.5 Company strategy 2.3 Tactical Launch Decisions 2.3.1 Product and brand 2.3.2 Price 2.3.3 Place and distribution

27 27 29 32 34 36 37 38 39 40

2.3.4 Promotion 2.4 New Product Performance 2.4.1 Features of success 2.4.2 Features of failures

42 43 44 45

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3. LAUNCH DECISIONS OF A NEW ARTIST WITHIN THE MUSIC INDUSTRY 47 3.1 Why, Goal Setting and Company Strategy 47 3.2 What, Product Strategy and Artist Brand 51 3.3 Where, Market Analysis and Market Strategy 54 3.4 When, Market-Entry Timing and Competitive Strategy 57 3.5 The Way, How to Make Marketing-Mix Work Together 58 3.6 Win, Successful New Artist Performance 62 3.7 Theoretical Framework 64 4. RESEARCH METHODOLOGY 4.1 Research Approach 4.2 Research Strategy 4.3 Research Process 4.4 Method of Data Analysis 4.5 Credibility

67 67 68 70 71 72

5. EMPIRICAL FINDINGS 5.1 Goals of the Interview Study 5.2 Launch Decisions Commented by Music Industry Professionals

74 74 75

5.2.1 Record labels 5.2.2 Promotion company 5.2.3 Music export company 5.2.4 Music producer 5.2.5 Concert and festival manager 5.2.6 Media representatives 5.3 Summarized Results Based on Findings 5.3.1 Why 5.3.2 What 5.3.3 Where 5.3.4 When 5.3.5 Way 5.3.6 Win

75 79 82 84 86 88 94 95 98 100 103 104 107

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6. SUMMARY, DISCUSSION AND IMPLICATIONS 6.1 Summary of the Study 6.2 Discussion and Conclusions 6.3 Implications

109 109 111 116

TABLE OF REFERENCES

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APPENDIX Appendix 1. Interview structure

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LIST OF FIGURES Figure 1. The Impact of launch decisions on new product performance. Figure 2. Outline of the study. Figure 3. Theoretical framework of 6W‟s.

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LIST OF TABLES Table 1. Relevant literature of product launch. Table 2. Features of the question why.

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Table 3. Features of the question what. Table 4. Features of the question where. Table 5. Features of the question when. Table 6. Features of the question the way. Table 7. Features of the conclusion win. Table 8. Summarized table of 6W‟s. Table 9. Comments of Jouni Perämaa and achieved findings. Table 10. Comments of Kimmo Valtanen and achieved findings. Table 11. Comments of Jon Lieberberg and achieved findings. Table 12. Comments of Paulina Ahokas and achieved findings.

51 54 57 59 62 65 75 78 80 82

Table 13. Comments of Jimmy Westerlund and achieved findings. Table 14. Comments of Juhani Merimaa and achieved findings. Table 15. Comments of Juhani Kansi and achieved findings. Table 16. Comments of Marianne Kiskola and achieved findings. Table 17. Comments of Heta Hyttinen and achieved findings. Table 18. Summarized findings of the question why. Table 19. Summarized findings of the question what. Table 20. Summarized findings of the question where. Table 21. Summarized findings of the question when. Table 22. Summarized findings of the question the way.

84 86 88 91 93 95 99 101 103 105

Table 23. Summarized findings of the conclusion why. Table 24. Comparison of theory and framework.

107 111

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_____________________________________________________________________ UNIVERSITY OF VAASA Faculty of Business Studies Author: Hans Timola Topic of the Thesis: Strategic and Tactical Product Launch Decisions and Performance of a New Artist within Music Industry Name of the Supervisor: Jorma Larimo Degree: Master of Science in Economics and Business Administration Department: Marketing Major Subject: Marketing Line: International Business Year of Entering the University: 2006 Year of Completing the Thesis: 2011 Pages: 127___________________

ABSTRACT The purpose of the study was to analyze and describe the strategic and tactical launch decision of a new artist within the music industry. Therefore, the main objective for the study was to investigate both theoretically and empirically the key strategic and tactical decisions and elements of a new product launch and further the performance of the new product. To achieve this, was developed a theoretical framework, model of 6W‟s. The model of 6W‟s was used as the framework of the study. The framework consisted of six different parts, five questions and one conclusion. These five questions (why, what, where, when, and the way) and the conclusion (win) were based on previous literature concerning strategic and tactical launch decisions and their impact on the new product performance. The basic model behind previous literature was based on the study of Hultink et al. (1997), which discusses the impact of strategic and tactical launch decisions on new product performance. This study was executed as a qualitative study. The methodology for the empirical part was interviews. The interviews were conducted through the middle form of semistructured and unstructured interviews while the theme and phenomenon acquired more open-discuss. Totally nine interviews were achieved with music industry professionals. The study was analyzed through content analysis, which enabled to process the data as accurately as possible. The main elements of the study were divided in three separate parts. Through this breakdown, it was possible to answer in research question and to obtain set objectives, both theoretical and empirical. Firstly, in chapter 2 was presented the theoretical background of the subject. Secondly, in chapter 3 the theory was used together with secondary data to form the theoretical framework. Finally, in chapter 5, the empirical part was possible to discuss as a whole, but at the same time based on chapters 2 and 3. Based on this breakdown, it was the best way to form findings and results. The findings and results pointed out that the launch of a new artist should be seen as a similar process than any product launch. Therefore, it is possible to suggest that strategic and tactical launch decisions of a new artist have impact on his or her success. KEYWORDS: strategic and tactical launch decisions, product commercialization, new product performance, an artist, music industry

launch,

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1. INTRODUCTION

1.1 The Background of the Study “It is hard to say what kind of music will be commercialized in these days. However, one thing is for sure, for an artist it is almost impossible to break through if you don’t have that personality for this industry. If you want to be a successful artist, you need to be like a tightrope walker of the circus. In these days, it is not enough to be just excellent, you need to be more.” This is how the Finnish music producer Jimmy Westerlund described today‟s successful artist within the music industry, in October 2010. This statement describes the status of an artist within today‟s music industry, which is going through a massive change (Lieberberg 2010; Perämaa 2011; Kansi 2011). The essence of the change has usually been explained through technological developments, the digital technology and the Internet. This change is so significant that it already has challenged every actor in the whole music industry. Ordanini, Rubera, and Sala (2008: 17) state that it is challenging to get marketing work together with creative industries, such as music, movies, and publishing. The reason, why creativity is challenging to combine together with economics, is because, it exposes at the same time you, your inner and most intimate feelings, ideas, wishes, hopes, dreams, your weak spots, traumas, sadness, fears, and vulnerability (Koivunen 2009: 13). Therefore, this topic may produce confused feelings, because the study examines the launch decisions of an artist product within the music industry. However, the study is important for artists and their background organizations to understand better what kind of factors are involved in their launch strategy. To achieve this, the study is based on basic economical knowledge and previous research on product launch. The link between launch strategy and new product performance has achieved attention, especially, during last three decades. Past research on the launch decisions and strategies suggests that the entry strategy affect the entrants‟ performance in the marketplace (Garrido-Rubio & Polo Redondo 2005: 29; Talke & Hultink 2010: 223). Therefore, the product launch or commercialization is the most critical stage of the whole new product development (NPD) process (Beard & Easingwood 1996: 87) and usually the most crucial for the success of a new product (Hultink et al. 1997: 244; Garrido-Rubio and Polo Redondo 2005: 29). In fact, product launch requires the largest commitment in time, money, and managerial resources (Urban & Hauser 1993; Beard &

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Easingwood 1996: 87; Hultink, Griffin, Hart, & Robben 1997: 244; Hultink and Hart 1998: 107; Garrido-Rubio & Polo Redondo 2005: 29; Calantone & Di Benedetto 2007: 4) and, therefore, it has been argued to be often the most expensive, risky, and least well-managed part of the overall NPD process (Chiu, Benson, Shyu & Tzeng 2006: 1245; Winter & Sundqvist 2009: 192). The relationship between launch strategy and new product performance is still not fully understood (Hultink et al. 1997: 245; Lee & O‟Connor 2003: 241). Even for wellmanaged new product development processes, there is still an expected high failure rate for new products at launch (Beard & Easingwood 1996: 87; Lee & O‟Connor 2003: 241; Ledwith & O‟Dwyer 2008: 97). On the other hand, typically, firms launch only a small amount of the products that they discover or develop (Dawid, Kopel & Daugl 2009: 322). For the products there is usually one shot towards the market (Beard & Easingwood 1996: 88). While this makes the launch stage even critical, it seems that many firms do not even develop pragmatic, monitored, and flexible launch programs (Calantone & Di Benedetto 2007: 5). When talking about global product launch, it is a complex process necessitating consideration of many trade-offs. Further, what makes it so challenging, is because of the increased speed of competition and new product introductions across markets resulting from globalization. (Harvey & Griffith 2007: 487.) Like designer and philosopher John Thackara (2010) states in document “Light Bulb Conspiracy”, new products are created after every three minutes. That is a challenge for every marketingmanager because the success of the product is likely to depend heavily on how well they deal with the launch (Beard & Easingwood 1996: 87). According to Soni and Cohen (2004: 263) the reasons why the products most commonly fail are due to these fixable factors: poor understanding of customers and prospects, lack of competitive analysis, lack of understanding of regulatory issues, lack of understanding of distribution, lack of up-front planning, and poor cross-functional communication. Therefore, it is highly important to understand at least next factors: customer and prospect needs, the marketplace, competition, product testing and validation, communication, and itself the process (Soni & Cohen 2004: 263-267). Obviously, it is highly important to take notice what to do and take under consideration within the commercialization and itself the launch process both within the music industry and in other industries too. Recent studies have identified two broad types of launch decisions: strategic and tactical. Strategic decisions discuss the questions “why,

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what, where and when” of a launch and tactical decisions the question “how” (Hultink et al. 1997: 243). While this study discusses the importance of the commercialization of an artist within the music industry, these two launch decisions are used to examine how it should be done and also what kind of impact these decisions have further on the performance of an artist.

1.2 Research Problems and Objectives Like stated already in the previous chapter, this study discusses the importance of a new product launch (NPL) strategy from marketing perspective when an artist is launched to the markets within the music industry. The purpose of this research is to study and observe the strategic and tactical decisions, which should be taken into consideration when launching an artist to the markets. The aim is to create a framework, which could show the importance of different strategic and tactical launch decisions and, further, which have an impact on the performance of an artist. Therefore, the research problem is possible to divide in two different questions: 1) What are the key elements of strategic and tactical decisions that are used when launching an artist to domestic or international markets? 2) How these strategic and tactical decisions have an impact on the performance of an artist? Based on above mentioned, it is possible to divide the objective of the study further in two, theoretical and empirical objectives. The theoretical objective of this study is to find out the key strategic and tactical launch decisions of marketing when entering markets and how these decisions are related to the new product performance. The main empirical objective is to investigate those key strategic and tactical decisions or elements of an artist and further how to launch an artist. The second empirical objective is to define how strategic and tactical launch decisions are related to the market performance of an artist.

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1.3 Scope and Limitations of the Study Limitations for the study are admitted due to fact that too many aspects cannot be covered within one study. Thereby, the study is based on existing literature on strategic and tactical launch decisions and their impact on new product performance. Further, the empirical findings are collected and achieved through personal interviews with the music industry professionals. The most used and referenced model concerning the last phase of the NPD process and the launch strategy is the model proposed by Hultink et al. (1997): “The Impact of Launch Strategies on New Product Performance.” This model and most of the recent studies have identified launch decisions within two broad types of categories: strategic and tactical launch decisions. Further the model demonstrates the impact of these two launch decisions on the performance of a new product (Hultink et al. 1997; GarridoRubio & Polo Redondo 2005: 30; Chiu et al. 2006: 1245). Within the next figure 1, it is possible to observe how strategic and tactical launch decisions have impact on product performance.

STRATEGIC LAUNCH DECISIONS  Product Strategy  Market Strategy  Competitive Strategy  Company Strategy

TACTICAL LAUNCH DECISIONS  Product  Price  Promotion  Distribution

PRODUCT PERFORMANCE  Overall  Customer determined  Financial  Technical performance

Figure 1. The Impact of launch decisions on new product performance (Hultink et al. 1997: 247).

While this study focuses on the new product launch process, it refers to the actual last step within NPD process, when a product is ready for commercialization and entering the markets. Therefore, this study is in order to limit partly the previous steps in NPD

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process. In this way, the study is entitled mainly to concentrate on the last phase. Further, there is a close relationship with terms product and service. In this study, a new artist is discussed and researched as a product. In addition, only new products (theoretical view) and new artists (empirical view) are taken for under consideration. When concerning the music industry in general, there are several objects or concepts that can be exported towards international markets (Ahokas 2011). These objects and concepts are music compositions (songs), music applications and services (high-tech products), and itself the artist product. This study concentrates mainly on new mainstream pop and rock artists; his or her strategic and tactical launch decisions, possible internationalization, and performance within markets. Other genres are taken under consideration at some extent and through examples. This research not only concentrates on product performance within international markets, because within mainstream music markets it is stated that the concept and performance is required first to be tested within domestic markets (Perämaa 2011; Valtanen 2011). However, it is possible to break through right away to the international markets, but the most common way is through domestic markets. In addition, while the study concentrates on artist, these same findings could be used also when launching a band to markets. At first the research idea was to make a study that would have discussed the status of the whole music industry. However, that subjective would have been too large and while the whole music industry is at the verge of massive change, it would have been too risky, especially, when even the industry professionals do not know exactly what actually has happened and what is going to happen within five years. Therefore, it was better to decide to discuss the importance of the launch of an artist. Further, at first the study was supposed to conduct as a case study, but because of the challenges to reach certain adequate artists and their background teams, it was impossible to accomplish. However, while it was possible to reach very good people and collect knowledge that is important for an artist launch in general, therefore, this study‟s importance is undeniable, especially, now when the whole industry is changing. What used to work before in the 1970‟s, does not work now necessarily.

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1.4 Previous Studies and Characteristics of the Music Industry Previous studies and literature The launch of the new products has been investigated by a number of different studies relating to product launch and its activities. Actually, this challenging phase has interested researchers for quite long time. (Hart & Tzokas 2000: 395, Talke & Hultink 2010: 221.) Surprisingly, past research and studies argue that much of the topic on new product launch has not been examined empirically until from the early 1990‟s (Hultink et al. 1997: 244; Hart & Tzokas 2000: 393; Thölke, Hultink & Robben 2001: 3; Garrido-Rubio & Polo Redondo 2005: 29; Calantone & Di Benedetto 2007: 4). The reason for this may lay under the fact that there is less time than required to develop perfect patterns that would involve all the steps of the launch process and also it may be hard to create a process model that would suite to every industries. As seen within next table 1, the most of the studies up until this time have been focusing on strategic and tactical launch decisions and, further, their effects on performance.

Author and year

Discussed topic

Calantone and Montoya-Weiss (1994)

The launch plan, launch timing, launch strategies, and control of the launch process New product launch (NPL) process: market preparation  targeting  positioning  attack Launch strategies and performance outcomes; strategic and tactical launch decisions Comparison of launch strategies for high and low advantage new products Launch tactics, new product relative advantage and compatibility; relationship between strategy and tactics Successful launches related to good execution of strategic, tactical, and information-gathering activities Strengths and weaknesses of launch strategies Relationship between communication strategy and performance outcomes is moderated by the product‟s innovativeness Launch plan, launch strategy, and performance outcomes Tactical new product launch decisions and performance outcomes Launch strategy: strategic concern, marketing concern, and organization concern Pricing and launch strategy Corporate mind-set determines the launch strategy decisions and performance outcomes

Beard and Easingwood (1996) Hultink et al. (1997) Hultink and Hart (1998) Guiltinan (1999) Di Benedetto (1999) Thölke et al. (2001) Lee and O‟Connor (2003) Soni and Cohen (2004) Garrido-Rubio and Polo-Redondo (2005) Chiu et al. (2006) Calantone and Di Benedetto (2007) Talke and Hultink (2010)

Table 1. Relevant literature of product launch.

In general, itself the launch strategy is defined as comprising decisions that set the parameters within which the new product will compete (Beard & Easingwood 1996: 91) and, therefore, it is important to ensure that all the elements of the product launch

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strategy are working together seamlessly (Winter & Sundqvist 2009: 192). These four most common comprising decisions are: market preparation, targeting, positioning, and attack (Beard & Easingwood 1996: 91; Talke & Hultink 2010: 223). Strategic launch decisions include target market decisions, leader versus follower decisions (timing), and decisions on relative innovativeness (Calantone & Di Benedetto 2007: 5). Strategic decisions are normally taken in the early stages of NPD process (Hultink et al. 1997; Garrido-Rubio & Polo Redondo 2005: 30; Chiu et al. 2006: 1245). Strategic decisions govern the tactical because they occur even before launching and they are decided before tactical decisions of the launch (Garrido-Rubio & Polo Redondo 2005: 30). Therefore, these decisions are hard to change and any change could mean high cost, once the NPD process has begun. Tactical decisions are normally taken when the physical and conceptual development of the new product has been completed, and, therefore, it is easier to modify in the final stages of development (Hultink et al. 1997: 244; Di Benedetto 1999; Garrido-Rubio & Polo Redondo 2005: 29; Chiu et al. 2006: 1245). Tactical decisions include familiar marketing mix decisions such as product branding, pricing decisions, distribution support, and promotion activities. Tactical decisions are usually made after the launch strategy has been decided, and may be influenced by strategic decisions already taken (Hultink et al. 1997; Calantone & Di Benedetto 2007: 5). Later studies have expanded from this literature base to investigate related issues such as the role of the logistics and the supply chain relationships in successful launch, differences in competitive reactions to launches of radical and incremental new products, launch signaling, the moderating role of product innovativeness, and the role of market orientation (Calantone & Di Benedetto 2007: 4). The most recent study by Talke and Hultink (2010) suggest that the corporate mind-set, in other words, a firm‟s general attitudes towards corporate behavior and further performance, determines the launch strategy decisions, which in turn impact market performance. In their study, launch tactics was not further explored. (Talke & Hultink 2010: 222-223.) The emerging picture of how new products are launched is dominated by theoretical rather than research-based perspectives. Hart and Tzokas (2000: 393) suggest that this obviously has several consequences. First, the literature tends to read rather like a shopping list of possible decisions. Second, there are few guidelines to advise those responsible for new product launch as how to allocate the large amounts of resource for

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commercializing new products. Third, there is a lack of appreciation of the dynamism of the launch decision and how it is contingent upon matching different types of new product propositions with constantly changing markets. (Hart & Tzokas 2000: 393.) When concerning the music industry, Ordanini et al. (2008: 17) state that where marketing is required to function together with the creative industries, such as music, movies, publishing, etc., it is a complex task, because the traditional sequential models for NPD process seem to perform badly. However, this suggestion is not widely studied and, therefore, not fully valid. Nevertheless, over the years, companies have started to apply structured processes for product launch (Soni & Cohen 2004: 264). Characteristics of the Music Industry It is widely recognized that the music industry of today looks almost nothing like the music industry of twenty years ago (Dubner 2007; Kiskola 2011). With different music formats, for instance mp3, and cheap producing equipment, these previous factors are indeed shattering the industry into smaller units (Brusila 2007: 57; Dubner 2007). This change has brought up another interesting viewpoint. Music exists around us and it is produced and also consumed more than ever (Ahokas 2011; Merimaa 2011). Music has always had a powerful influence over different cultures and people listen to music while doing almost anything these days. Through easy ways to listen to music, the consumption of music is at high level. Therefore, the importance of music around us is undeniable. Everyday hundreds of millions of people listen to music through Internet, iPods, radios, home stereos, or other devices. Nevertheless, recorded music would only be hence regional without record labels. There are four major record labels (”the big four”) that control and produce over 70 per cent of the world‟s recorded popular music. These record labels are Universal Music Group, Sony Music, Warner Music International, and EMI music. (Cashmere 2007; RLD 2010.) Launching new releases is one of the most important core processes for record labels (Ordanini et al. 2008: 20). Everyday new aspiring performers and artists try to achieve attention from record labels by his or her music. Therefore, for instance in Finland, every year thousands of homemade demo tapes are sent to record labels (Perämaa 2011; Valtanen 2011). In other words, if we think about the amount of demos that are sent worldwide every year, it must be hundreds of thousands. That tells us that there are new aspiring musicians worldwide and the variety and also the offering of music is probably richer than ever (Lieberberg 2010; Perämaa 2011). However, while music exists more

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than ever, it also produces at the same time the status of oversupply (Lieberberg 2010; Ordanini et al. 2008: 21). Smith and Maughan (1997: 7) suggested over a decade ago that the digital revolution will lead up to a new era in music-making, especially, among young people. For instance, in the late 1990‟s, only 1-2 per cent of the demos led to further interest and, when talking about internationalization the percentage was even smaller, less than 0,1 per cent (Ahonen, Chaker & Honkamaa 1998: 12). Therefore, the average success rate for new artists and their releases is quite low (Ordanini et al. 2008: 20). This approves the fact that sometimes homemade is the only way to make and produce own music because the studio recording time is normally costly and to be noticed from the mass is difficult (Kostiainen & Takalo 2004: 106). However, nowadays, an international star can arise through the use of Internet and e-communications, while it is possible to produce a record at home, with equipment that fits in a wardrobe or under a bed (Brusila 2007: 58). Still, to gain success, it requires cleverness, high-quality demo or EP, outstanding producing of the music from the artist, and all the business activities, such as marketing and distribution, need to run properly. While recording industry is diverging, at the same time, it is creating a new structure to the whole industry. For instance, the nature of marketing and sales has been changing rapidly because of shattered media field and new consumption customs. One extremely significant matter is that all the changes, that have had impact on the recording industry, have caused entirely new business – service workers (Brusila 2007: 59). For instance, good examples of these new service workers are: music web stores, free distribution, computer games- and multimedia production, for recording industry tailored Internetand advertisement services, and mobile phone ringtone business (Brusila 2007: 59; Ahokas 2011). Nonetheless, there are at least five observations that can be made about today‟s music industry. First, major record labels have always played a key role in the planning and managing the international breakthrough of an artist (Ahonen et al. 1998: 12). Secondly, the major record labels have already started their search to find continuously new business activities to generate more profits by means of for instance sponsor contracts, book publications, movie careers, and itself the artist‟s brand (Brusila 2007: 59). Thirdly, although record labels seek continuously new business opportunities, in this new business environment old major record labels do not function probably the most efficient way. This is because when observing the traditional scheme of the record

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labels, they only have been used to build an artist‟s image and the brand to sell actual recordings attempting to generate profits (Longhurst 1996: 29). Fourthly, despite constant attempts to establish a sense of brand loyalty to an artist, or to develop or imitate hit formulas, despite all of the marketing and promotional techniques and coping strategies, it seems that the music industry has constantly produced more failures than successes for even quite long time (Negus 1992: 152-154). Finally, the fifth and the last notification is that the major record labels have cut large numbers of staff and severed ties with many artists. Such moves are not necessarily bad business choices, but they suggest that less attention should be given to revenues and more to profits (Strumpf 2007).

1.5 Outline of the study This study consists of six main chapters. These chapters and their content are described more within next paragraphs and illustrated within next page in figure 2. The first chapter describes the importance of the subject by providing background information on the topic. In addition, the research problem and main objectives of the research are introduced alongside with the scope and limitations of the study. After these have been explained, previous studies and characteristics of the music industry are discussed thoroughly. The second chapter handles the basic concepts of market performance through strategic and tactical launch decisions. This chapter starts by presenting briefly the motives to internationalize and commercialize a product. After these identifications have been described, following subchapters discuss the features of strategic and tactical launch decisions as well as new product performance. The third chapter concentrates more on strategic and tactical decisions and also the win factors of an artist. For this is provided a model of 6W‟s, which are based on questions why, what, where, when, the way, and the conclusion – win. In the end of the third chapter, a theoretical framework will be drawn from the basis of the previous literature. The fourth chapter introduces the research methodology used in the study. Firstly, in this chapter is presented the research approach and strategy chosen for the study including more detailed explanations why these specific approaches were selected.

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Secondly, the research process is explained and discussed to clarify the method for data collection and data analysis. Finally, in the end of this chapter, the credibility of the research is discussed. The fifth chapter is devoted to presenting and analyzing both the findings and results received from the research. Each of the interviews will be gone through abbreviated comments and findings. Finally, a discussion chapter, chapter six, involves the summary, conclusions, future research proposals, and managerial implications.

1.    

2.

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INTRODUCTION Background for the study Problems and objectives Scope and limitations Previous literature and the characteristics of music industry

MARKET PERFORMANCE THROUGH STRATEGIC AND TACTICAL LAUNCH DECISIONS Motives to internationalization and commercialization Strategic launch decisions Tactical launch decisions Performance of a new product

PRODUCT LAUNCH DECISIONS OF A NEW ARTIST WITHIN THE MUSIC INDUSTRY

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6W‟s Theoretical framework

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RESEARCH METHODOLOGY Research approach Research strategy Research process Method of data analysis Credibility

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EMPIRICAL FINDINGS Goals of interview study Abbreviated comments Findings Results

6.

SUMMARY, DISCUSSION AND IMPLICATIONS Summary Conclusions Implications

  

Figure 2. Outline of the study.

3.

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2. MARKET PERFORMANCE THROUGH STRATEGIC AND TACTICAL LAUNCH DECISIONS Marketing is understood to be a human activity, which focuses on satisfying customer needs and wants through different exchange processes (Haverila, Uusi-Rauva, Kouri & Miettinen 2005: 221). The actual marketing process can be summarized into two: make the product and sell the product (Kotler & Keller 2006: 36). When launching a new product this exchange process has a significant importance. Therefore, a marketer and a company must try to understand the target market‟s needs, wants, and demands (Kotler & Keller 2006: 24). In product launch, the planning of marketing is important. Cooper (1994: 228) states, “Marketing planning is an ongoing activity that occurs formally and informally throughout much of the NPD process.” Therefore, the importance of marketing plan is undeniable in the phase of commercialization. Hultink et al. (1997: 243) have presented an identification of the launch strategy components by reviewing the previous launch strategy literature and interviewing managers responsible for making launch decisions. Hultink et al. (1997) also stated that the new product launch must include five key issues. These are: why, what, where, when and how to launch. The first four questions govern strategic and the last one tactical launch decisions (Hultink et al. 1997: 243). Both, product launch strategy and tactics, have a significant importance on new product performance (Chiu et al. 2006: 1245). Hultink et al. (1997: 243) further state that the strategic launch decisions made early in the whole NPD process has an impact on the tactical decisions made later in the process. Nevertheless, tactical launch decisions have been noticed to have more significance (Hultink et al. 1997: 243; Di Benedetto 1999; Ledwith & O‟Dwyer 2008: 97). Next chapters 2.1–2.4 discuss the importance of strategic and tactical product launch decisions for product‟s performance and what are the motives to internationalize and to commercialize a product.

2.1 Motives for Internationalization and Commercialization When deciding to internationalize, the company needs to define its marketing objectives, policies, and also how many countries to enter and how fast to expand (Kotler & Keller 2006: 670). Further, motives behind internationalization can be

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divided traditionally into two: push or pull –factors (Luostarinen 1979: 64). Commercialization is one of the last stages in the new product development process (Cooper 1994: 226). Commercialization may begin when the product is completed and ready for launching to both domestic and/or international market (Lambertz and Geckeler 1996: 213). At this point the door to full commercialization opens, but it is also the point at which the project can still be canceled (Cooper 1994: 117). Internationalization and commercialization will be discussed more closely within next subchapters‟ 2.1.1-2.1.2. 2.1.1 Motives to internationalize Push and pull -factors As stated already above, motives behind foreign market operations can be divided into two: push or pull –factors (Luostarinen 1979: 64-93). Push factors include motives, which tend to push the company and its products towards the international markets. The two major push factors are the size of domestic markets (the geographic, demographic, economic size of a nation) and the openness of domestic markets (the level of tariff and non-tariff barriers restricting the entry for business operations of foreign firms). Pull factors include motives, which persuade the company and its products away from its national market due to the opportunities existing in a foreign market. The two major pull factors are the mutual openness of the foreign markets and the large size of the foreign markets. Pull factors are more or less opportunity-oriented motives, which provide incentives to gain better profits in a foreign market place. Luostarinen has been a trendsetter for many other authors that have adopted the division of internationalization motives. For instance, Ellis and Williams (1995: 47–48) explains pull and push –factors as follows: A push factor can appear when the market saturation in national market changes because of increasing costs of, for instance, production or supply that further results as rising input costs or the change within legal environment. A pull factor can appear when the market rapidly expands, which offers the possibility to gain profits from a high level of sales or a target market which has lower costs of production due to better resources in raw materials and labor.

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Push and pull -strategy The words push and pull can be seen also through another sense – through marketing channel and promotion strategy. Push and pull –strategy defines the movement of a product or information between two subjects. Push and pull –strategy can be defined as described below (Harrison, Lee & Neale 2003: 17-20; Kotler & Keller 2006: 468). Push strategy is based on the conception where the offers‟ or suppliers push the products towards the consumers. In other words, a push strategy involves the manufacturer using its sales force and trade promotion money to attain intermediaries to carry, promote, and sell the product to the end users. Push strategy is appropriate, for instance, when there is low brand loyalty, when products are impulse items, and when the product features are well understood. In contrast, pull strategy is based on the conception where the consumers usually pull the goods or information they demand for their needs from the offered or supplier. In other words, a pull strategy involves the manufacturer using advertising and promotion to persuade customers and prospects to ask intermediaries for the product, thus attaining the intermediaries to order it. Pull strategy is appropriate, for instance, when there is high brand loyalty, when people perceive differences between brands, and when people choose the product before purchasing it. 2.2.2 Motives to commercialize As stated earlier in the beginning of this chapter the decisions of why, what, where (to whom), when, and how to enter the market may have a substantial difference to the new product‟s prospects. These six questions will be discussed next shortly. Why? Reasons behind the new product launch! Only one good idea may be the trigger for commercializing a new product. Idea may be generated by the market place or requested directly or indirectly from customers (Cooper 1994: 121). In music business, both market place and customer need develop the offering of the music, which is produced to the consumers. In other words, the products or music that is or has been produced are both market-pull and industry-push. Market-pull artists represent the majority of the new artists, because it is presumable that without pull-effect it is hard to commercialize or even internationalize any artist. Industry-push artists, on the other hand, could be those artists that have been developed for instance through different American Idol –programs and so forth.

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Under this question it is also possible to consider goal setting, company strategy and internationalization. Without going through these three aspects it is impossible to set any goals, which is desired by the whole organization; it is impossible to monitor the consequences of any action; and finally it is impossible to complete marketing research, milestones, and benchmarking (Cooper 1994: 230). Therefore, as seen above, it is highly important for a new product and its background organization to be able to answer to question why before the actual commercialization. What? The product itself! In general, without a product there would be nothing to promote. In music business, without any artists there would be no music to promote. Therefore, the importance of making a product as unique as possible is vital. As will be stated later on within subchapter 2.2.3, it is important to notice that the new products can be developed only in the long run. A product needs to create and have its own place in the markets and it needs to be at least slightly different from others similar products (Kotler & Keller 2006: 19). In other words, it is vital for a product to be valuable and beneficial for its target customers and prospects. Where? Geographical strategy, targeted prospects, and the scale of entry! One of the most important decisions for a company is to decide where to launch the product. This involves the decision whether to launch the new product in a single locality, a region, several regions, the domestic market, or the international markets (Kotler & Keller 2006: 656). Important factors at this point are to understand the company size and resources, to specify and adopt a focus in designing and developing new products, to define the target market and segment, and to accomplish influential positioning for the product (Cooper 1994: 236; Trott 1998: 96; Kotler & Keller 2006: 656). Question where involves also another question, which is to whom. This question answers to problem, which are the target market prospects and the scale of entry. To get prospective customers talking and thinking about a product is crucial (Trott 1998: 96). Therefore, it is important for a company to target its distribution and promotion to the best prospect groups (Kotler & Keller 2006: 658). To achieve customers and prospects attention, high levels of effort and resource commitment are needed. If the attention has been achieved, it can result further high level of market exposure during the entry period and a product‟s long-term performance within the market (Trott 1998: 96).

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While it would be possible to answer to questions where and to whom as seen above, it still may not be enough. The reason is the gatekeepers. Gatekeepers are those who make the decision for go or kill the product at the stage of commercialization (Cooper 1994: 200). Actually, the gatekeeper theory is one relevant part when observing the whole music industry. According to the theory within music business, it is important for every new artist to notice that only a minor part of all music will be published at some point on a record, and a very small part of all published music will end up into radio play or wider distribution. Especially in nowadays, it is very hard to evaluate which product or an artist will make a breakthrough or achieve good or enough profit to make music as a living. The music industry cannot define success in advance but it tries to predict which product or an artist will make through. (Brusila 2007: 49-50.) When? Timing! In commercializing a new product, entry timing is crucial (Kotler & Keller 2006: 656). Therefore, timing needs to be accurate. Bad timing can kill the product where as good timing can make the product (Trott 1998: 95). In other words, being too early in the market can be as much of disaster as being too late. Within music business, timing has great importance too. It is important to notice when the music itself or the trend is popular, what is the right time or even right month to launch the new artist and his or her releases in the target market, and what kind of competition is expected, for instance, are there any similar new artists trying to make a breakthrough. How? Tactical aspects for the market introduction! To answer question how, it is possible to use traditional marketing mix of four P‟s. Marketing mix (4P) is based on four different marketing tools, which are product, price, place, and promotion (Kotler & Keller 2006: 19; Hollensen 2007: 415-416). Product or brand is the fundamental of every action. Pricing is the marketing method that enables revenues for a company. Distribution and the place where the actual goods exist are the linkage between the product‟s producer and the customer or prospects. Promotion is the tool to communicate with customers and add persuasive value to a product so as to provide information that buyers need to make purchasing. Finally, it would be a good thing for a company to develop an action plan or scheduling system for introducing the new product in the markets (Kotler and Keller 2006: 658). According to Soni and Cohen (2004: 264-265) the actual launch plan should address at

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least these basic issues: What are the launch goals and strategy? What are the target customers, prospects and market for sales and overall revenues? Who are the major players within the process? What are the key milestones? And how will the product introduction to be communicated? Through an action plan or a scheduling system it is easier to develop a master chart that shows the simultaneous and sequential activities that must take place when launching the product. Without a scheduling system, it is hard to predict, for instance, how much time each activity within launch process takes. (Kotler & Keller 2006: 658.) Especially, when thinking an artist without a scheduling system, it could be easily one vital reason why the artist never could achieve the attention of possible fans or prospects.

2.2 Strategic Launch Decisions Hultink et al. (1997: 245) state that the strategic launch decisions govern why to launch, what to launch, where to launch, and when to launch. In other words, the strategic decisions pay attention to goal setting, market analysis, product strategy, market targeting, competition, and corporate mind-set. These strategic launch decisions are discussed next within subchapters‟ 2.2.1-2.2.6. 2.2.1 Market analysis and goal setting The primary function of marketing is to make and sell what target market buyers want (Hollensen 2007: 154). Therefore, the role of marketing analysis and goal setting are the key factors towards making better results. Without knowing both the company‟s own strengths and weaknesses, and also the industry-related opportunities and threats, the company or its products will not be as successful as they could be. Therefore, marketing analysis and goal setting are good to take under consideration within new product launch strategy. These matters are discussed shortly within next paragraphs. Market analysis There are four different parts that are good to involve in market analysis. These four are the importance of information, market research, situation analysis, and market test. Firstly, the importance of information is undeniable. Information is the key in the development of successful marketing strategy. Companies are forced to collect information about different relations inside their company, within their supply chains, and also about their target markets. Information is needed for knowing the customers

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and prospects, competitors, and the market environment. Information is highly important also because of the growing complexity and diversity of both domestic and international markets. (Hollensen 2007: 153.) Secondly, market research may be difficult, but it reveals the truth how to enter the market and reach prospects. The common mistake that many companies do is that they do not accomplish any market research before entering the unknown market (Hollensen 2007: 155). If company and its product would only operate in one country, the research would be significantly easier. When a market researcher has to deal with a number of countries, which may also differ in many ways, the challenge is greater. Hollensen (2007: 156) states further that when entering foreign markets, it is suitable to collect data for next five questions: whether to internationalize or not, which markets to enter, how to enter, what is the marketing program, and how to implement and control the marketing program? Researcher must always check that the data are gathered correctly, efficiently, and at reasonable cost. The data, which are collected, may be primary or secondary. Primary data are usually information that is collected first-hand through specific research questions. Secondary data are usually information that has been collected earlier for other purposes and therefore it is already available. (Hollensen 2007: 155-170.) Thirdly, situation analysis is important by means to know the resources of the company and the industry status. Kotler and Keller (2006: 60) define situation analysis as follows: “Situation analysis presents the current data on sales, costs, the market, competitors, and the various forces in the macro environment.” In further, how is the market defined? How big is it? How fast it is growing? What are the relevant trends affecting the market? What is the product offering and what are the critical issues facing the company? The common tool for examine these attributes is to use SWOT (strengths, weaknesses, opportunities, and threats) analysis. (Kotler & Keller 2006: 60.) Finally, market test needs to be accomplished. Trott (1998: 360) states as follows: ”As products compete with one another they are thus compared with one another.” Therefore, before launching a product it needs to be tested within markets. The purpose of the market testing and validation phase is to test and validate the entire viability of the project: The product itself, the production process, customer acceptance, and the economics of the project. This phase also involves all the last reparations and last trimmings of the project after it has clarified the test use. (Cooper 1994: 116).

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Goal setting What do we want to achieve and where do we want to go? These two questions could be the first ones when setting marketing objectives. It is not enough to say that a product must gain a status within markets. The marketing objectives that are specified for a new product must have a purpose (Cooper 1994: 230). Therefore, it is good to find answers to questions that really support the marketing objectives. Good marketing objectives must set criteria for making decisions, they must be quantifiable and measurable, and they must specify a time frame (Cooper 1994: 230). Cooper (1994: 230) categorizes further the roles of objectives. First, an objective is a decision criterion; the consequences of each action should be weighed against objectives. Second, the set of objectives for a new product creates a sense of purpose; there must be a goal, which is desired by the whole organization. Third, objectives become a standard of measurement; marketing research, milestones, and benchmarking are critical during the launch phase. While setting objectives, one very important factor is to understand that the objectives are not just set at the beginning of the process and left behind. It is a must to visit again at the object-setting stage later on, even number of times, while moving on towards actual marketing plan. Therefore, it is good to remember that marketing objectives for a new product represent a merging of what is desired and ideal, and what is possible to achieve. (Cooper 1994: 231.)

2.2.2 Product strategy When entering international markets a new product may be already an old product within its domestic markets. Therefore, it is important to notice that the new products can be developed only in the long run (Kotler & Keller 2006: 19). Therefore, a product needs to have its own place in the markets and it needs to be at least slightly different from others similar products. Product strategy is needed to emphasize how the organization seeks to differentiate its product, and position the product, from its competitors. That will be the fundamental of its market positioning. (Trott 1998: 90.) What the product will be goes hand-in-hand with the selection of the target market. In other words, target market definition and product strategy, together, are the leading edge of the strategy development (Cooper 1994: 240). Therefore, for a new product to be

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successful in the market, it is vital to be valuable and beneficial for its target customers and prospects. The benefit needs to stand out, to be distinctive, and to be attractive (Trott 1998: 90). Next will be examined what are the characteristics of a product and service, further, the basic features of the new product, and the importance of product differentiation and positioning. Product and service Product is one of the elements of traditional marketing mix (4P). Other elements are price, place, and promotion (Kotler & Keller 2006: 19; Hollensen 2007: 415-416). Product or service refers to what the business or nonprofit organization offers to its customers. While this study concentrates on product launch decisions, it is good to describe the differences between a product and a service. Next two paragraphs describe the essence of these two. Kotler and Keller (2006: 372) state a product as follows: “A product is everything that can be offered to a market to satisfy a want or need.” In other words, a product is not only a tangible offering – it is more. The word product involves in other words physical goods, services, experiences, events, persons, places, organizations, information and even ideas (Kotler & Keller 2006: 372). Therefore, a product is a multidimensional concept (Trott 1998: 119). Service, on the other hand, can be stated as follows (Kotler & Keller 2006: 402; Hollensen 2007: 423): “A service is any act or performance that one party can offer to another that is essentially intangible and does not result in ownership of anything.” The difference between a product and service is that when a service is produced, it is not tied to a physical product. Nonetheless, product and service may be separated but a product may also include a service. Therefore, a product is different than a service. Still, in today‟s world, where there are more and more service workers, it is presumable that the line between these two terms could be narrowing down. Novelty of a product Trott (1998: 119) argues as follows: “Does the provision of different packing for a product constitute a new product? Surely the answer is no – or is it?” Newness or novelty is a relative term (Trott 1998: 120). Rogers and Shoemaker (1971; see in Trott

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1998: 120) argued already in the 1970‟s what is new: “While it may be difficult to establish whether a product is actually new as regards the passage of time, so long as it is perceived to be new it is new.” In other words, when categorizing products by its newness it is important to know the history of the product. Further, Trott (1998: 120) states that, astonishingly most of the so-called new products are developments or variations of existing formats. In general, new products and their novelty can be defined in two senses (Cooper 1994: 11; Trott 1998: 120; Hollensen 2007: 433): newness to the market and newness to the company. When comparing these two dimensions, a product can have several different degrees of newness (Cooper 1994: 12; Trott 1998: 120; Hollensen 2007: 433). A product may be a slight modification of an existing product, it may be new to the domestic markets (entirely new to the world), or it may be an entirely new to international markets. The market failure increases with the newness of the product. Product differentiation In competitive markets, companies need to differentiate their product offering continuously from competing products in order to survive (Thölke et al. 2001: 3-4; Kotler & Keller 2006: 150). Differentiation can be based on itself the product, its distribution, or its marketing in general. In other words, product differentiation is then needed to develop a position that potential customers see as unique. (Haverila et al. 2005: 68-69.) If differentiation is accomplished successfully, it may increase the customer and prospect awareness, increase the sales, increase the market share, and most of all increase the cash flow (Haverila et al. 2005: 59). How is it possible then to make a product different from others? Kotler and Keller (2006: 376-380) introduce tools for product and service differentiation as follows: form, features, quality, durability, reliability, repair ability, style, ordering ease, delivery, installation, customer training, and customer consulting. Fundamentals for achieving these abovementioned are to differentiate the product or service in a way that it really has undeniable competitive advantage (Haverila et al. 2005: 59). Product positioning Positioning in the marketplace means how the product will be perceived by potential customers (Cooper 1994: 240; Trott 1998: 91). In other words, product positioning should be used to gain a competitive advantage in people‟s mind. If that is achieved, then, a customer or prospect can associate even one attribute to the product and because

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of that one attribute he or she is willing to buy or select the product (Laakso 2004: 150; Hollensen 2007: 437). From the brand perspective, positioning is everything that the brand represents for a customer or prospect (Laakso 2004: 150). Product positioning is important element in the successful marketing of any company or organization in any market. If a product does not have a clear position in customer‟s mind, it does not stand for much (Haverila 1995: 30; Hollensen 2007: 437). Product positioning is based on market segmentation and product differentiation (Cooper 1994: 240). The product positioning begins with describing specific products as comprising different attributes that are capable of generating a flow of benefits to buyers and users (Cooper 1994: 240; Hollensen 2007: 437). 2.2.3 Market strategy When answering the questions where and to whom, it is good to be able to answer to following questions: What is the target market? What are the current challenges facing customers? How are the customers‟ business processes changing? What about other markets? What are the buying processes and drivers? What is the channel used by these customers and similar products? (Soni & Cohen 2004: 264.) When discussing itself the market strategy, it illustrates target markets and target customers, market segmentation, demand within the market, and possible new market space when entering markets. These matters are discussed next. Target market and segmentation The product launch brings the producer face-to-face with the customer or prospect. Not everyone likes the same movie, actor, song, or artist. Soni and Cohen (2004: 263) state that it is important to step back and genuinely and fully understand the customer needs so as to become customer-centric. The reason for this is that customer needs are often not what customers or prospects articulate they want in terms of a specific product (Soni & Cohen 2004: 263-264). Nevertheless, understanding the marketplace is another important factor within strategic launch decisions. Kotler and Keller (2006: 126) define that it is possible to break down the market to four different categories. These four categories are potential market, available market, target market, and penetrated market. The potential market includes those consumers who admit a sufficient level of interest in a market offer. The available market includes those consumers who have interest, income, and access to a particular offer. The target market is the available market the

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company decides to push and pursue. The penetrated market includes those customers and prospects that are already purchasing the company‟s products. (Kotler & Keller 2006: 126.) These four examples show the importance of finding for a new product the most suitable segment. Marketers start finding the target market by dividing up the market into different segments (Haverila et al. 2005: 252; Kotler & Keller 2006: 24). It is important process because through identifying and profiling groups of buyers it is possible to divide different customers and prospects to smaller segments, which are easier to adapt, control and monitor (Kotler & Keller 2006: 24). Additionally, by executing this process, it is possible to contribute positively and sometimes even crucially to goals that were set earlier in the new product launch process (Haverila et al. 2005: 252). After when this has been achieved, a company or a marketer may decide, which segment is the most suitable and presents the greatest opportunity (Kotler & Keller 2006: 24). There are not many companies or products that have ability to function within comprehensive or broad markets. Therefore, the segmentation decision is vital and also the criteria for different segments need to be measurable, relevant, and functional. (Haverila et al. 2005 252-253.) Measurability reflects the available information about the interested target groups, which is needed to possess. Relevant represents the ability to classify customer groups the way, in which, they react the different marketing programs. Functionality stands for that the chosen criteria should illustrate different buying or consumption behavior between different segments. It is important to notice that when launching a new product, the purpose is only to choose those segments that are truly potential (Haverila et al. 2005: 254). Market demand As mentioned above a product cannot always satisfy everyone in a market. Kotler and Keller (2006: 127) state that the marketer‟s first step in evaluating marketing opportunities is to estimate total market demand. Demands are wants for specific products that a certain consumer is able to buy (Haverila et al. 2005: 252; Kotler & Keller 2006: 24). Those customers that are able to benefit the most about the product itself and its features are the most profitable to the company and product itself. Further, the better the need and demand is fulfilled for the customer, the longer will be the customer-relationship with the product. (Haverila et al. 2005: 252.)

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Kotler and Keller (2006: 126-127) illustrate the demand through one type of Rubik‟s cube. The 3–D cube has as many as 90 different types of demand estimates (6x5x3). There exist six different product levels (all sales, industry sales, company sales, product line sales, product form sales, and product item sales), five different space levels (world, country, region, territory, and customer), and three different time levels (short, medium and long run). Each demand measure has its own specific purpose in this model. (Kotler & Keller 2006: 126-127.) There are undoubtedly also other ways to observe market demand. Creating new market space when entering markets Kim and Mauborgne (2005: 4) discuss market strategy and achieving success through their model of blue ocean strategy. They state that when creating new market space it should be based on more to creating uncontested market space than to overcoming direct competition. Through this mentality, new market space would be more appealing to a whole new group of customers. To examine this, Kim and Mauborgne used as an example how the circus group, Cirque du Soleil, reinvented the Circus. The story behind Cirque du Soleil towards success was that they actually did not compete against any one; they actually overcame the competition by stop trying to beat the competition. (Kim & Mauborgne 2005: 4.) Blue oceans have been around us at least one hundred years, but, the term, blue oceans, is relatively new (Kim & Mauborgne 2005: 5-6). Blue ocean strategy is based on imagination of market universe that is composed of two sorts of oceans: red oceans and blue oceans (Kim & Mauborgne 2005: 4). Red oceans represent the known market space, while blue oceans the unknown market space. In red oceans companies try to outperform their rivals to gain a greater share of existing demand. This also increases the risk that the products become commodities and intense rivalry turns the red ocean bloody. Blue oceans, on the other hand, is based on of conception where there is better to find new patterns and solutions from the market where there is no competition. Kim and Mauborgne (2005: 5) state further that it will always be important to swim successfully in the red ocean by out-competing the competitors. But, to create new profit and growth opportunities, companies also need to create blue oceans. 2.2.4 Competitive strategy Next paragraphs discuss the importance of competitive advantage and timing. Timing is also closely related to decisions of early, follower, and late starters.

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Competitive advantage Competition is one extremely important factor when launching a new product to the market. According to Chiu et al. (2006: 1244) when trying to achieve a competitive advantage, launching a new product to the target market quickly is the only requirement. Porter (1985) clarified over twenty-five years ago that there are two ways how to increase competitive advantage. These are cost advantage and differentiation advantage. According to another definition by Haverila et al. (2005: 226), there are actually only two ways, how the companies may increase the added value for their customers and prospects. These both are related to the costs. The first is to increase the buyer‟s benefits comparison to total costs. The second is to decline total costs comparison to buyer‟s benefits. (Haverila et al. 2005: 226.) Therefore, cost of a product has a relevant importance when launching a new product. Timing and time pacing Timing answers the question when. As stated already in subchapter 2.1.2, when commercializing a new product, entry timing is crucial (Kotler & Keller 2006: 656). In other words, timing of the launch also critically affects the new product success. The appropriateness of launch timing can be assessed on several dimensions such as: relative to firm goals, relative to competitors, relative to customers, and relative to channel promotions. (Calantone & Di Benedetto 2007: 7.) If a product is brought up too quickly in the markets, it may damage the company and also the product itself in a way that it is no longer retractable from the markets (Trott 1998: 95). In close relationship with timing is time pacing. Time pacing is a strategy for competing in fast-changing, unpredictable markets by scheduling change in predictable time intervals. Whether a company is small or large, it may use time pacing. Time pacing is important within markets that won‟t stand still. One very important feature for time pacing is that sometimes to achieve more, you need to stop and wait for the right moment. (Eisenhardt & Brown 1998: 60.) Early, follow or late starter The decision to be early, follower, or late starter is also important. This decision is external consideration (Kotler & Keller 2006: 656). External considerations are involved with competition and rivalry. In other words, if a company has almost completed the development work on its new product and it is facing the fact that a

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competitor is also nearing the end of its development work, the company faces at least three choices to enter the market: first entry, parallel entry, or late entry. (Kotler & Keller 2006: 656.) 2.2.5 Company strategy Levitt (1983) argued already in the early 1980‟s that companies should grow by selling their products all over the world. Therefore, it is vital for the long-term growth of companies that they are able to launch successful new product introductions when necessary (Beard & Easingwood 1996: 91; Lee & O‟Connor 2003: 241; Winter & Sundqvist 2009: 193). According to Talke and Hultink (2010) new product performance is related to firm‟s resources, corporate mind-set and market-oriented culture. Therefore, it is important to ensure that all elements of the launch strategy reinforce and support each other (Hart & Tzokas 2000: 402). Dawid et al. (2009: 324) introduces three decision stages that a company should take under consideration. These three are the innovation stage, the product selection stage, and the production stage (Dawid et al. 2009: 324). Further, it is crucial for companies to find knowledge about customers and prospects and avoid conflicts between different product launch elements and stages (Winter & Sundqvist 2009: 193). Organizational structure refers to company‟s formal reporting relationships, procedures, and controls (Harris & Raviv 2002). After structural decisions have been made, it is easier to identify the company strategy. Every company needs to have its own strategy, which applies to questions such as: what is this business where we are into, what is our primary target customer or prospect group, and why this company is established (Haverila et al. 2005: 50)? Hultink and Hart (1998: 107) discuss also these above mentioned as protocol decisions. Protocol decisions describe comprehensively the objectives set for the company and itself the new product launch; characteristics of the target market, timing, competition. Further, protocol decisions govern key issues of the tactical launch decisions: pricing, promotional messages given, and channels of distribution (Hultink & Hart 1998: 107,109). Changes in the environment where a company operates are everyday routine. To achieve success, it is highly important for companies to operate based on the business environment‟s weak signals. These signals are not easy to notice and companies are forced to actively search for them. If a company does not try to read its business environment‟s weak signals, its renewal ability decreases, which has straight effect on

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its ability to compete in the markets. (Haverila et al. 2005: 70.) Therefore, it is important for a company that it sets its operation plan, vision, and mission beforehand – not after the new product launch. In other words, a company needs to have an idea what does the organization want to achieve in the long run, which markets are the most potential, and which consumers and prospects are the target customers now and also in the future (Haverila et al. 2005: 51). After that, it is suitable to think, when and how to launch the new product. There is a significant gap between the number of product projects firms undertake and the number of products actually introduced to the market. Until a firm introduces a new product in the market, a sequence of decisions has to be made. This multi stage-nature of the NPD process is captured for instance through widely used Stage-Gate model (Cooper 1994; Dawid et al. 2009: 321-322). Stage-Gate model includes following typical decisions: screening and scoping, building of business cases, development, testing and validation, and itself the product launch. Nevertheless, if company management determines to improve the development stages of a new product, especially the launch itself, then it is probable that greater success rates will be achieved (GarridoRubio & Polo Redondo 2005: 29). In order to analyze company‟s decision leading to the introduction of new products, it is therefore important to consider not only the incentives to invest in product projects but also the firm‟s incentives to launch a developed product (Dawid et al. 2009: 322). The smartest companies today make a distinct effort to build a knowledge base of all product launch efforts – analyzing what actually worked and what did not (Soni & Cohen 2004: 268).

2.3 Tactical Launch Decisions Hultink et al. (1997) state that the tactical launch decisions govern the question how to launch the product. In other words, tactical launch decisions pay attention to branding, pricing, distribution, and promotion. It is obvious that the launch strategy for a new product requires a mix of marketing tools where all elements work together and reinforce one another (Hart & Tzokas 2000: 395). For this it is possible to utilize the traditional marketing mix, which consists of a product, price, place, and promotion (4P). In addition, when marketing services, marketing mix also involves people, processes, and physical evidence (7P) (Kotler & Keller 2006: 19; Hollensen 2007: 415-416). Next four subchapters 2.3.1-2.3.4 discuss the importance of traditional marketing mix in new product launch process.

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2.3.1 Product and brand Product and Product advantage As stated earlier in subchapter 2.2.3: “A product is everything that can be offered to a market to satisfy a want or need” (Kotler & Keller 2006: 372). Therefore, the product is the fundamental of tactical launch decisions. Without a product there would not be anything to promote to the markets. Products have different kinds of layers and levels (Hollensen 2007: 422; Kotler & Keller 2006: 372). Hollensen (2007: 422) introduces “the three levels of a product”. These are core product benefits, product attributes, and support services. Kotler and Keller (2006: 372) define “the five product levels”. These are core benefit, basic product, expected product, augmented product, and potential product. The basic idea of these models is that the core layers include vital elements, such as the essence of the offering, product performance, and the benefit of the service. The exterior layers, on the other hand, include elements that are more intangible, such as quality, brand, delivery, and after-sales service. Product advantage comprises the degree of unique benefits not previously available, the extent to which customer needs are better satisfied, the product‟s relative quality, and the extent to which the new product solves customer problems better (Hart & Tzokas 2000: 390). Product advantage has consistently been shown to be a key differentiator between success and failure in the development of new products (Hultink & Hart 1998: 110; Ledwith & O‟Dwyer 2008: 98). Brand Branding is more than product identification; it is also a powerful positioning tool (Hultink & Hart 1998: 110). The choice of branding also features as product launch decisions, which can be seen to support the new product‟s position (Hart & Tzokas 2000: 390; Hultink & Hart 1998: 110). Through brand name it is possible to connect customers to the company or the product itself (Hultink & Hart 1998: 110). According to Hultink and Hart (1998: 116) a higher proportion of products with high advantage adopt existing brand identities, whereas a higher proportion of low advantage products are more likely to build on the overall company name for the launch. A brand is not born until consumer experience in his or her mind that a product has a certain added brand value when compared to similar products within the market. To

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build a brand is a process, which may take a long period of time. Therefore, it needs to be able to build with determination and knowing the possible competitors. (Laakso 2004: 83-84.) The process itself includes five different stages, which are: analyzing the brand, creating familiarity, combining wanted features to products image, allowing purchase, and attaining brand loyalty (Laakso 2004: 83, 85-283). There are countless amounts of products in the world. Therefore, it is good to remember that if a company is not able to create familiarity to its brand, why that product or brand should be chosen (Laakso 287)? 2.3.2 Price Pricing is the marketing method that enables revenues for a company. Other elements of traditional marketing mix waste company‟s resources (Haverila 1995: 22). Pricing is an important factor at the time of launch, as barriers to adoption may exist (Calantone & Di Benedetto 2007: 6). In other words, when launching a product, the price is an element integral to its appeal or lack of appeal, because the price is often seen as reflection to its competitive positioning and for consumers it may be a measure, for instance, of a quality (Hultink & Hart 1998: 111; Hart & Tzokas 2000: 390). Pricing is therefore a very important element within new product launch processes. Pricing decisions are always at the center of the management dilemma (Calantone & Di Benedetto 2007: 6). Pricing is an important strategic and tactical tool that in contrast to other marketing-mix tools is highly controllable and not that expensive to change and implement (Hollensen 2007: 475). Pricing element is easy to change very quickly (Kotler & Keller 2006: 19) and it has a direct effect on the attractiveness of the product offered (D‟Aquila Scheer 1992: 76). Falling prices generally stimulate demand, but at the same time reduce revenues and margins for the company, unless costs fall even faster (Calantone & Di Benedetto 2007: 6). When launching a product to markets, a company needs to consider at least these next eight pricing factors while setting its market offering (Kotler & Keller 2006: 437-450; Cooper 1994: 243-248): what is the target market and positioning strategy, other strategic issues and selection of the pricing objective, what is the relation of the demand to price and product‟s value, estimated costs which need to cover, competitors and their pricing, what is the contribution profit and selection of a pricing method, selection of promotional pricing, and selection of the final price. In addition, companies must decide

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between skimming and penetration pricing, which is by nature a long-term choice (Hultink & Hart 1998: 111-112; Hart & Tzokas 2000: 391). The skimming versus penetration price decision is closely linked with the new product‟s marketing mix strategy (Calantone & Di Benedetto 2007: 6). Traditionally, skimming has been seen the most profitable route when considering highly innovative products. It is also the most effective when the product is perceived to have a relative competitive advantage, and it is highly compatible with the buyer‟s experiences and values. Penetration pricing, on the other hand, has been seen the most profitable if the economies of scale as volume sales of the products increase along with diffusion. In other words, where the scale of entry is at the minimum level, skimming is advised, where it is high, penetration is preferred. (Hultink & Hart 1998: Hart & Tzokas 2000: 391; 111-112; Calantone & Di Benedetto 2007: 6.) Because pricing is highly important, it needs to be seen through broader scale. Price cannot be determined by itself and independently of the rest of marketing-mix (Kotler & Keller 2006: 433-434; Calantone & Di Benedetto 2007: 6; Hollensen 2007: 475). 2.3.3 Place and distribution Distribution is crucial in the eventual acceptance and sales of a new product in the market. It determines the availability of the new product to the customer and prospects (Hultink & Hart 1998: 112; Hart & Tzokas 2000: 392). Therefore, to invest in distribution is highly important (Hart & Tzokas 2000: 401). In business-to-consumer trade, distribution has a vital importance when planning a marketing-mix. Channels of distribution or the place where to get a product is the linkage between the producer and the customer or prospects (Haverila 1995: 23; Hollensen 2007: 506). In other words, without distribution, it is impossible to deliver the goods to ultimate user of the product. In addition, distribution channels are usually possible to change only in the long run. Therefore, when planning and choosing the channels or the way in which to access in the markets, it should be one of the key decisions within marketing-mix. The basic idea behind distribution and place decisions is to get the product available at a time and location desired by the market (D‟Aquila Scheer 1992: 77). The chosen distribution or sales channels must reflect the target market‟s buying behavior and allow for the maximum availability to the target market. Chosen distribution channel will have a straight impact on the promotional strategy and, together with price and advantages of

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the product, they are expected to vary in relation to how fast or slow the product market is growing. (Hultink & Hart 1998: 112; Hart & Tzokas 2000: 392.) The customer is again the keystone (Hollensen 2007: 508). Without customers there would not be any channel design. The nature of the product, demand, and the competition are highly important (Hollensen 2007: 508-509). Characteristics of a product determine the strategy, demand determines the volumes to produce, and the competition determines what the odds to compete in the markets are. Nowadays, there are multiple competitive sales channels where to choose, when trying to reach customers or prospects (Andritsos & Tang 2010: 366). There are the oldfashioned retail channels and other heavy business-to-business or business-toconsumers channels, which are based on the products that are physically traded (Hollensen 2007: 506-526; Kotler & Keller 2006: 468-493). According to Hultink and Hart (1998: 118-119) products with high advantage tend to be distributed more through old and current channels, whereas products of low advantage rely more on using new channels of distribution. Andritsos and Tang (2010: 366) state that new products are typically introduced through multiple, competing sales channels. Different non-exclusive distribution channels enable companies to expose their new products to consumers through the extended reach of channels, and also provide the convenience for consumers to make purchases through alternative channels. When products or new products are sold through an exclusive channel, the retailer can enjoy various benefits including: firstly, higher retail price, because the product is not available elsewhere, and secondly, higher store traffic overall. The company‟s perspective for this is that an exclusive sales channel provides better control of the customer‟s experience and interaction with the new product. This is also because new products may not receive the necessary attention from the retailers when they are sold under the non-exclusive arrangements. (Andritsos & Tang 2010: 366.) The Internet, E-commerce, and E-marketing have changed drastically the balance of power among the consumers, retailers, distributors, manufactures, and service providers (Hollensen 2007: 526). E-commerce can be stated as follows (Kotler & Keller 2006: 493): “The company or site offers to transact or facilitate the selling of products and services online.” In contrast, e-marketing can be defined as follows (Kotler & Keller 2006: 493): “E-marketing describes company efforts to inform buyers, communicate, promote and sell its products and services over the Internet.” The extent, to which these above described terms are used within a company, depends on company goals and what

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kinds of distributional actions the company wants to offer through Internet. Hollensen (2007: 526-527) introduces four Internet distribution strategies that can be utilized: present only product information in the Internet, leave Internet business to resellers, leave Internet business to the manufacturer only, and open Internet business to everybody. Sometimes it is good to use a distribution approach totally different from others and hope that the alternative way would develop a competitive advantage (Hollensen 2007: 509). Unfortunately, still, history suggests that companies are not willing to change their old habits and they tend to stay with declining distribution networks for too long, which may be crucial for them (Hollensen 2007: 527). 2.3.4 Promotion According to Hart and Tzokas (2000: 401) high-levels of effort in both selling and promotion determine the success of the new product launch. However, there is very little empirical research into discovering the most effective use of resources in presenting the new product to its target market (Hart & Tzokas 2000: 391). The reason behind this might be that companies are not willing to give exact information about successful communication with customers and prospects. Marketing communication mix is the collective term for all communication functions used in marketing a product (Kitchen & De Pelsmacker 2004: 20). In marketing and business, the role of marketing communications is to communicate with customers and add persuasive value to a product so as to provide information that buyers need to make purchasing (Hultink & Hart 1998: 110; Kitchen & De Pelsmacker 2004: 20; Hollensen 2007: 541;). In other words, marketing communications helps define an organization‟s relationships with customers not only by the kind of messages exchanged, but also by the choice of media and occasion to suit their customers‟ preferences (Kitchen & De Pelsmacker 2004: 20). The tools in the marketing communications mix can be divided into two main categories: to those with direct communication and to those with indirect communication (Zikmund & D‟Amigo 1993: 565). Traditionally, the distinct tools of the marketing communications mix are advertising, sales promotions, direct marketing, public relations (PR), personal selling, word-of-mouth marketing, relationship marketing, and over the recent years, Internet marketing, and sponsorship (Hart &

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Tzokas 2000: 391; Kotler & Keller 2006: 512). In launching a new product, marketers typically rely on such conventional promotion methods as advertising, personal selling, and sales promotion. These traditional marketing communication tools can be sometimes relatively expensive and as frequently used they might not be effective in overcoming consumer resistance to new products (Barczak, Bello & Wallace 1992: 55). However, each used tool needs to have a specific task. Further, the message is greatly enhanced if it is reinforced by other tools in the mix (Yeshin 1998). All the marketing communications in the product launch should and need to be integrated (Di Benedetto 1999; Winter & Sundqvist 2009: 193). The investments in the marketing communications and sales promotion given over to trade and consumers are linked to the extent to which the new product is following a push or a pull (Hultink & Hart 1998: 110-111). It has been suggested that where lower levels of awareness of a product exist, a pull, rather than a push, strategy for advertising and promotion is required (Hisrich & Peters 1991; Hultink & Hart 1998: 111; Hart & Tzokas 2000: 392). In addition, according to Hultink and Hart (1998: 118) the types of communication media used, is in a close relation to what is the product advantage of the new product. If a product is classified as a high advantage product, the media used are those associated with a push strategy such as trade promotion. Low advantage products rely more on a pull strategy, therefore, to a greater extent on customer promotions. (Hultink & Hart 1998: 118.)

2.4 New Product Performance As seen within previous chapters, the commercial success or failure of a product does not rest solely on the product itself. There exist strategic and tactical launch decisions that have impact on the performance of the launched product (Hultink et al. 1997: 247). These strategic and tactical launch decisions were discussed within previous chapter 2.2 and 2.3. Hultink et al. (1997: 247) divide the product performance to four different categories. These are: overall performance, customer-determined performance, financial performance, and technical performance. In addition, innovative and new projects are always considered to be risky, costly, and time consuming (Hultink et al. 1997: 255). According to Chiu et al. (2006: 1250), the key to success in the launch process is often attached to the strategy, which is used. Therefore, it is vital to plan the launch process strategy well beforehand.

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As stated above, both strategic and tactical launch decisions have an impact on how successful the product eventually will be. Further, success or failure can be measured through goals and objectives both in short-term and long-term performance. Short-term performance can be measured through the size of installed base and the speed of actual development. Long-term performance is possible to measure through market share, profitability (ROI), satisfaction of the customers and prospects, and loyalty of customers and prospects. (Lee & O‟Connor 2003: 245.) The performance is also linked to what kind of targeting has been done. There are two kinds of targeting: niche targeting and mass targeting. Niche market is usually a narrowly defined group that may seek a special combination of benefits for which it is willing to pay a premium. Mass market is based on economies of scale, both in production and distribution, resulting in a cost advantage and in the preemption of future competition. (Lee & O‟Connor 2003: 250.) 2.4.1 Features of success Soni and Cohen (2004: 263) argue that launching products that meet customer requirements, competition, itself the development and launch process, and effective internal preparations have better chances to perform successfully. In other words, successful product launch depends on the ability to ramp up the supply of a new product to its targeted sales volume (Burkett 2005: 12). Therefore, especially, distribution and promotion has also vital importance for the overall success (Garrido-Rubio & PoloRedondo 2005: 35). In addition, all the key players in the supply chain must be willing to openly embrace collaboration as a critical enabler of the new product launch process (Burkett 2005: 12). According to Chiu et al. (2006: 1244), to be successful, a company must be able to master product strategy and efficiently navigate through proper development, and application and management of a product strategy that separates success from failure. Therefore, the corporate mind-set has impact on success. In other words, a company must be able to set corporate mind-set that is characterized by an analytical, aggressive, and risk-taking posture (Talke & Hultink 2010: 232). Perfect product launch would involve at least next 7 attributes, which are described here. Firstly, product launch needs to be profitable and it should meet business financial goals. Secondly, it must be exciting in order to create demand in the market place.

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Thirdly, it needs to be reliable and able to perform to defined specifications. Fourthly, it must be focused and able to deliver the most important product in a portfolio. Fifthly, product launch needs to be efficient and use only those optimal resources, which are available. Sixthly, it needs to be customer-centric and clearly meet defined requirements of the market. Finally, a new product must be delivered at the appropriate time to satisfy demand. (Burkett 2005: 12.) 2.4.2 Features of failures With the high risk of failure comes the potential for great reward. However, recently, different researches have consistently revealed high failure rates for new products. For instance, there exist wide market landscape with examples of companies that have not understood that the successful product launch depends on the ability to ramp up the supply of a new product to its targeted sales volume (Burkett 2005: 12). In fact, it is extremely common that within a company nobody knows what is happening and what should be done next (Ordanini et al. 2008: 30). Calantone and Di Benedetto (2007: 5) argue that many companies do not develop pragmatic, heavily monitored, and flexible launch programs. Soni and Cohen (2004: 263) define the most common reasons why products fail. According to them product launch failures are due to such fixable factors as: poor understanding of consumer needs, lack of competitive analysis, lack of understanding of distribution issues, lack of up-front planning, and poor cross-functional communication. Therefore, it is good to understand that even the greatest innovations never provide business benefits, if the supply chain is unable to deliver (Burkett 2005: 12). Consumer is the key to success. If the new product is not capable of offering a value to the consumer that is superior to the value those others on the market offer, it is presumable that the product will not perform well after the launch and it will at some point fail (Garrido-Rubio & Polo Redondo 2005: 33). Especially, communication needs to be run properly, because it has obviously direct impact on the launch performance outcomes. In addition, if there exists unwillingness to learn from previous mistakes, it is presumable that the same mistakes are going to be repeated. (Ordanini et al. 2008: 30.) Schneider (2005: 10) discusses that through avoiding five common mistakes, it is possible to perform better. These five common mistakes are: the launch strategy is planned right before the release date, the plan is inflexible, employees are educated

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poorly to know about the product and the launch campaign, media options are not well used, and, finally, crisis plan is not developed.

The purpose of this chapter was to show the importance of strategic and tactical launch decisions and also to clarify the motives to launch or commercialize a product to the markets both domestically and internationally. The commercialization phase or the product launch can be seen through strategic and tactical launch decisions as described within previous chapters. How these decisions are organized and monitored will in the end define the performance of the new product. Within next chapter 3, the purpose is to propose a model of 6W‟s that could be able to use as a tool to define the importance of strategic and tactical launch decisions, when launching an artist towards either domestic or international markets.

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3. LAUNCH DECISIONS OF A NEW ARTIST WITHIN THE MUSIC INDUSTRY

There can be set up five questions concerning product launch decisions, which are based on the models proposed by Hultink et al. (1997) and Kotler and Keller (2006: 656-658). The questions concern strategic and tactical launch decisions towards new product performance. These five questions are: (1) why, goal setting and company strategy; (2) what, product strategy and brand; (3) where, market analysis and market strategy; (4) when, market-entry timing and competitive strategy; and (5) the way, how to make marketing-mix work together. These five questions and the conclusion win are discussed next, within chapters 3.1-3.6 together with secondary music industry data. In addition, in following paragraphs, there exist also some comments acquired from interviews, which are related to launch decisions of an artist, but which are not straight tied to findings and results.

3.1 Why, Goal Setting and Company Strategy The question why, is related to strategic launch decisions. Within the music industry this question should give an answer to dilemma: why a new artist should be launched to markets? The answer is: people want to listen to music. Nevertheless, the question why should be able to give answers also to next following features such as where the artist idea comes up, what kind of company is possible to organize behind an artist, what is the company strategy and its goal setting, is it reasonable to launch towards domestic and/or international markets, and what is the status of the industry environment. These features are illustrated next in table 2 and described within following paragraphs.

 Artist idea  Company behind an artist

Why?

 Company strategy  Goal setting  Towards domestic and/or international markets  Music industry environment

Table 2. Features of the question why.

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Artist idea In general, artists have been seen before more as party animals and people who are just having fun. However, that is not the truth, at least not anymore. To be a successful artist, nowadays, requires control, good physical health, gym, and healthy way of living (Aaltonen 2011). Finnish rock singer Marko Saaresto from band Poets of the Fall argues in Juntunen‟s (2008) article that attitude towards making music needs to be as follows: “It is ok whether we sell or do not sell any records, the main thing is that the itself music making is cool.“ In other words, the starting point of an artist idea is to have fun and to do it just for the pleasure with good people around you. After that it can easily be only one well used chance that may trigger the commercializing of an artist. The whole innovation process of an artist is always initiated by an idea. In other words, the artist‟s process begins, when an individual artist or a band have one or more songs and they also become aware of the fact that their music may have a chance to be successful (Karhumaa 2000: 221). There are of course other ways too. Sometimes an artist rises through different talent competitions, such as American Idol, X-Factor, and Talent. According to Norah Jones, a globally known country and jazz singer, the road to success within the recording industry may begin before you even know it – secretly (Kostiainen & Takalo 2004: 10). In other words, from the artist point of view it can be stated that one particular situation, factor, or issue may expose to an idea that inspire to carry it even further. The situations, factors, and issues vary. In addition, at this point, it is good to realize does the music have a demand within the public. Company behind an artist Nowadays a new artist should establish his or her own artist company. CEO for the company would be the manager of the artist or band. Through this kind of arrangement, an artist could concentrate only where he or she is best – making and performing music (Ahokas 2011). In other words, selling, achieving different contracts, and taking care of the economics would be on the responsibility of the manager. Presumably, after an artist has established his or her own company, it is time to approach record labels. New artists, whom are signed to record labels, can come to their consciousness almost from everywhere. Record labels observe their potential new talents, for instance, through Internet, demo-tapes, and gigs (Perämaa 2011). Further, there exist several different ways how an artist can organize his or her activities after establishing the company. Firstly, an artist can make a decision to establish an own small record label. Wider distribution and promotion could be able to accomplish

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through partnership, for instance, with a large major label. Secondly, an artist can choose to go along with a medium-size or large indie label, which usually produces the artist‟s recordings, but which is not necessarily involved with promotion and distribution. Thirdly, an artist can sign a contract with a large major label or promotion company, which usually is involved with every action and function that is possible to connect to an artist: brand, recordings, distribution, promotion, touring, and etcetera (Lieberberg 2011; Perämaa 2011). What the major label will in the end operate depends on the contract between the artist and the label. Company strategy As represented already in subchapter 2.2.6, every company needs to have its own strategy, which applies to questions such as: why this company is established, what kind of business this is where we are into, and how to reach our primary target customer or prospect groups. It is important for every company or record label that handles new artist launches within the music industry, to set its operation plan in general and for every genre that they represent. Also vision and mission need to be set beforehand, not after the artist launch. In other words, a company needs to have an idea what does the organization want to achieve through an artist, in the short and long run. Further, which markets are the most potential for it, and which consumers and possible fans are the target prospects, now and also in the future. Music business and the whole industry are based on partnerships (Ahokas 2011). This is also one very important part of the company strategy. The examples above how the partnerships are tied in today‟s music business are good examples of how the performance of an artist should or could be organized. In other words, partnerships can be seen, for instance, between artists and major labels, labels and sponsors, and artists and promotion offices. They exist everywhere. In general, to attain success, an artist needs to be well connected and able to find knowledge about prospects and potential fans, and also avoid internal organizational conflicts, while launching the artist brand and its releases. Goal setting As it was stated already in subchapter 2.2.1, what do we want to achieve and where do we want to go, has a great importance within launch. Without any goals it is quite impossible to plan itself the launch process and to measure success factors and failures. Therefore, an artist needs to set objectives at least at some level. A goal for an artist may be defined both in short-term and long term. Short-term goals could be related to

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release a song or an album and to create a tour based on these two previous within chosen target market. Long-term goals could be related to, for instance, developing a successful career, which includes many song and album releases, and even worldwide tours. Towards domestic or international markets There are not many record companies that have ability to function within broad international markets. Within the music industry there are five big companies that have this ability. These companies are Universal, Sony, Live Nation, Warner and EMI. Therefore, to create a real international star is hard and it happens only rarely. Firstly, it is challenging how to identify local talents with international potential. Obviously, searching for a new star, even locally, is like looking for the needle in the haystack. As stated above, each new release is a risk and, therefore, very few local artists have international appeal. Naturally, launching new artists towards international markets also cost more. Further, from the economical point of view, it is important that when even thinking to conquer new areas and parts of the world, the background organization is really well built. After the certain line has been crossed towards international markets, it becomes the artist‟s full-time job (Jokelainen 2011B). Music industry environment It has been recognized widely that the music industry is going through a massive change at the moment. However, this is not unusual, because as stated already in subchapter 2.2.6 the changes in the environment where companies operate are everyday routine. As mentioned already in the introduction chapter, the reasons behind the change within the music industry are mainly based on technological developments, the digital technology and the Internet. This has created a challenge for every company that operates within the industry. Today‟s trend is, for instance, that organizational structures are changing while major labels are buying smaller medium-sized indie labels and promotion companies (Merimaa 2011). Obviously, through these actions, major labels are able to acquire more skillful people and better artists under their wings. Why then this change has occurred? Within the music industry, reading the weak signals did not happen, when the actual change occurred. For instance, Haverila et al. (2005: 70) state that to achieve success, it is highly important for companies to operate based on the business environment‟s weak signals (Haverila et al. 2005: 70). When the

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new technologies gave an opportunity for consumers to download music from the Internet, the music industry was too slow with its counter actions (Merimaa 2011; Perämaa 2011). When downloading started in Internet through illegal platforms, such as Napster, the industry started to fight against the technology and the change that now has been seen revolutionizing the whole industry. In other words, the industry and the record labels trusted too strongly that the digital revolution would not be possible.

3.2 What, Product Strategy and Artist Brand The question what, is at the same time related both strategic and tactical launch decisions. Within the music industry this question should give answer to dilemma: what is launched to markets? The answer is: a new artist product that is differentiated and positioned individually. Nevertheless, the question what should be able to give answers also to next following features such as what kind of a product an artist is, what are the basic characteristics of an artist, how an artist is possible to differentiate and position, how the artist brand should be developed, and how is it possible to determine the novelty of an artist. These features are illustrated next in table 3 and described within following paragraphs.

 An artist is a product  Differentiation

What?

 Positioning  Artist brand and the key characteristics of an artist  Novelty of an artist

Table 3. Features of the question what.

An artist is a product If, we look back in the 1960‟s, it is obvious that even Elvis was a product. Therefore, artists can be seen as products, when they are commercialized. Of course it is true that the basis of an artist should be the need to make music. But the world and industries are under constant change, especially, nowadays when recordings and actual music does not sell like they used to. Like stated already in subchapter 2.1.2, without a product there would be nothing to promote. In music business, without any artists there would be no music to promote. Therefore, it is possible to see an artist as a product. However, not

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everyone fully agree with the previous statements. This definition does divide people‟s thoughts and, therefore, it is an important matter to be discussed. Differentiation The essence of product differentiation is the need to develop a position for a product that potential customers see as unique. As it was stated in subchapter 2.2.3, in competitive markets, companies need to differentiate their products continuously from competing products in order to survive. This applies also within the music industry. An artist needs to be seen as unique as possible. Therefore, it is presumable that record labels and promotion offices need to differentiate artist products and brands in order to survive. Differentiation can be based on itself the product, its distribution, or its marketing in general. When thinking a new artist, if differentiation is accomplished successfully, it may increase the number of fans and their awareness, increase the overall listening rates, sales, increase the market share, and also increase the cash flow. Positioning As stated already in subchapter 2.2.3, product positioning should be used to gain a competitive advantage in people‟s minds. From an artist point of view, if a fan or prospect can associate to the artist, then a potential listener or fan is willing to buy or select the artist. In addition, from the brand perspective, positioning is everything that the brand represents for a customer or prospect (Laakso 2004: 150). Further, product positioning is an important element in the successful marketing of any company or organization in any market. This applies also within the music industry. If an artist does not have a clear position in the minds‟ of the fans, it does not stand for much. As Cooper (1994: 240) states: product positioning is based on market segmentation and product differentiation, therefore, it is important for an artist to recognize its markets, fans, and how he or she differs from other similar artists. Artist brand and the key characteristics of an artist As Hultink and Hart (1998: 110) argue, branding is more than product identification; it is also a powerful positioning tool. Therefore, the artist brand is highly important when connecting with prospects and fans. Valtanen (in Ahokas, Frisk, Hyvönen, Jaakonmaa, Nieminen, Nikula & Pesonen 2004: 157-158) argues that there appears to be four different key characteristics behind successful artist brands, which are product, desire, style, and story.

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As it was stated in subchapter 2.3.1, through brand name it is possible to connect customers to the company or the product itself. From the music industry point of view, previous statement could be seen as follows: a fan is connected to the artist or the company behind an artist. The most common way is that a fan is connected straight to the artist. It is crucial for an artist, to understand that his or her brand is not born until prospects and potential fans experience that an artist and the music has a certain value when compared to similar artists within the market. It was stated in subchapter 2.3.1 that when building a brand, it could be seen as a process, which may take even longer period of time. ”Shooting star” -artists may be produced through TV shows like American Idol, Talent, and X-factor, but for them the challenge is to remain popular. Therefore, to be successful, it is better to create something own, not to follow and copy others, because then you are usually already one step behind (Kiskola 2011; Merimaa 2011). Novelty of an artist Novelty of a product was discussed more thoroughly in subchapter 2.2.3. It was stated that it is not easy to offer a single definition for a new product. This applies also with an artist. For instance, if an artist has been before his or her solo career a lead singer in a band: is he or she then a new product to the markets? Obviously, at least, an artist needs to create a new position after the decision to change the career from band to solo. Trott (1998: 120) states that most of the so-called new products are developments or variations of existing formats. This can be seen easily also in today„s music business. It seems that the most of the mainstream artists sound and look alike. It is not surprising, because within mainstream music there appears to be several products of the concepts such as American Idol, Talent, and X-Factor. The person that rises from that kind of competition have definitely had desire to be an artist but he or she may have had problems to find, for instance, his or her style, image or other similar characteristics (Kiskola 2011). In other words, an artist has not had time to build his or her own identity and all the characteristics might have been “decided” beforehand. That obviously produces quite similar products to the markets.

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3.3 Where, Market Analysis and Market Strategy The question where, is related to strategic launch decisions. This question also involves another question, which is to whom. Within the music industry these questions should give an answer to following dilemmas: where and to whom an artist should be launched to? The answer is: to markets that are segmented in a way that an artist reach its target prospects and fans. Nevertheless, these questions should be able to give answers also to next following features such as how the market analysis is accomplished, what are the target markets, how segmentation has been planned, who are the fans, is there a demand for the new artist within the market, and is it possible to reach success through creating blue oceans. These features are illustrated next in table 4 and described within following paragraphs.

 Market analysis  Target market and segmentation

Where?

 Target prospects and fans  Market demand  Creating new market space, blue oceans

Table 4. Features of the question where.

Market analysis As stated in subchapter 2.2.2, the role of marketing analysis and planning are the key factors towards success. Therefore, if a record label does not recognize its own strengths and weaknesses, and also the music industry-related opportunities and threats, the record label and its artists will not be as successful as they could be. Therefore, general information, market research, situation analysis, and market test are important also within the music industry. Information is the key within marketing analysis and, therefore, both record labels and artists need to be aware what happens around the industry and what are the potential markets now and also in the future. Target market and segmentation Understanding the marketplace is crucial, because the music taste varies within different regions and cultures in the worlds. Therefore, it is important to find the right segment and, even further, the right fans. As stated in subchapter 2.2.4, when launching a product, itself the launch brings the producer face-to-face with the customer or prospect.

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This applies presumably also in the music industry. Therefore, the marketer of a record label really needs to come up with a market strategy for a new artist. As it was stated earlier in subchapter 2.1.2, one of the most important decisions for a company is to decide where to launch the product. Therefore, segmentation traditionally starts when a marketer starts to find a target market. This involves the decision whether to launch the new product in a single locality, a region, several regions, the domestic market, or the international markets. As in general, this part is presumably highly important process also within the music industry. Like in any other industry, it is important to notice that when launching a new artist, the purpose is only to choose those segments that are truly potential. In general, through identifying and profiling groups of prospects and possible fans, a record company or a promoter may decide which segment is the most suitable and presents the greatest opportunity. When this has been achieved, it is possible to divide prospects and fans to even smaller segments, which could be easier to adapt, control and monitor. Target prospects and fans Which are the potential target market prospects and fans? As stated also in subchapter 2.2.4, to get prospective customers talking and thinking about a product, is crucial. This is possible to see applying also within the music industry: to get prospects and potential fans talking and thinking about an artist is important. Without fans there would not be a successful artist. Therefore, it is important that a record company target its distribution and promotion to the best prospect groups. Further, to achieve the attention of potential fans, high levels of effort and resource commitment are needed. While it would be possible to define target market and target prospects, an artist may still not breakthrough. The reason is the gatekeepers. Gatekeepers are those who make the decision for go or kill the product at the stage of commercialization. Actually, the gatekeeper theory is one relevant part when observing the whole music industry. According to Brusila (2007: 49-50), it is important for every new artist to notice that only a minor part of all music will be published at some point on a record, and a very small part of all published music will end up into radio play or widely distributed. Especially in nowadays, it is very hard to evaluate which product or an artist will make a breakthrough or achieve good or enough profit to make music as a living. In other words, the music industry cannot define success in advance but it tries to predict which product or an artist will make through.

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To reach potential fans nowadays is getting harder and harder because of the oversupply in the markets. This makes the process to approach potential fans quite challenging for new upcoming artists. While record sales have been reducing, usually, it has had a positive impact for LIVE and touring. However, the situation now is that even touring and the demand of LIVE has also started to reduce, both internationally and for instance in Finland (Jokelainen 2011A). Therefore, it is possible to ask: is there enough demand for new potential stadium stars in the future and if so, how will fans find their ways to those concerts (Kansi 2011)? Market demand Like in any other industry, also within the music business both market place and customer need develop the offering of artists. In other words, the products or music that is produced are both market-pull and industry-push. However, whether an artist is a market-pull or industry-push, it always needs to be pushed first towards the market that potential fans could be able to recognize it (Lieberberg 2010). After the push, the audience makes their decision and that determines the performance of an artist within a particular market (Merimaa 2011). As stated in subchapter 2.2.4, demands are wants for specific products that a certain consumer is able to buy. In other words, those customers who are able to benefit the most about the product itself and its features are the most profitable to the company and product itself. Within the music industry, it could be seen that the marketer‟s first step in evaluating marketing opportunities is to estimate total market demand. It was stated earlier in the study that, nowadays, music is produced more than ever. Therefore, an artist needs to define its target market and potential fans to compete within its primary target market and the attention of its target market prospects. Creating new market space, blue oceans Kim and Mauborgne (2005: 8) argue as follows: “There exist several driving forces behind a rising imperative to create blue oceans. These are globalization, technological developments, declined trade barriers, and the increasing consumer know-how. All these driving forces enforce management of companies to find new solutions how to stand out from the crowded industry and find those blue oceans. This will be hard because the current range of managers is accustomed to swim in the red oceans.” This describes more than better how things could be seen also within the music industry.

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How to create a blue ocean within the music industry? To battle in the red oceans might be one of the biggest problems also when launching new artists within the music industry. Therefore, it could be asked, do the actors of the music industry really seek for uncontested market space and what is, for instance, the real goal for major labels to buy the smaller labels and service workers nowadays? It is undeniable fact that the music industry is going through a big change because of the changes of music consumption. However, why not answering to this change through offering something new to the consumers? The music industry should seek solutions or blue oceans that would be profitable to all the actors in the whole supply chain from artist to consumers.

3.4 When, Market-Entry Timing and Competitive Strategy The question when, is related both to strategic and tactical launch decisions. Within the music industry this question should give an answer to dilemma: when a new artist should be launched to the markets? The answer is: at the right time, with competitive advantage. Nevertheless, the question when should be able to give answers also to next following features such as what is the best market-entry timing, how is it possible to achieve competitive advantage, and does it have an importance to be an early or late starter within music business? These features are illustrated next in table 5 and described within following paragraphs.

 Competitive advantage

When?

 Market-entry timing  Early or late starter

Table 5. Features of the question when.

Competitive advantage Competition is one relevant factor when launching a new product to the markets. As it was stated in subchapter 2.2.5, when trying to achieve a competitive advantage, launching a new product to the target market quickly is an important requirement. Therefore, within the music industry, it is presumable that an artist needs to think also the timing from that perspective, if there has been launched a similar artist, it might be better to wait for some time and to create a new window for the release moment. Another choice is to launch quickly and be the first one standing in the markets.

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Nevertheless, if an artist is willing to survive, he or she needs to notice the competition around. Therefore, record labels should take care of their potential artists also in the long run. Market-entry timing Entry timing is crucial! As it was stated in subchapter 2.2.5, bad timing can kill the product where as good timing can make the product. Further, timing needs to be relative to firm goals, relative to competitors, relative to customers, and relative to channel promotions. These apply also within the music industry. In addition, within music business, it could be asked, what is the right time or even right month to launch the new artist and his or her releases in the target market? Therefore, time pacing is also important. Early or late starter As it was stated in subchapter 2.2.5, companies face at least three choices to enter the market: first entry, parallel entry, or late entry. However, being too early in the market can be as much of disaster as being too late, because, timing of the launch critically affects to the new product success. This applies partly also in music industry. If, for instance, a record company has almost completed the development work on its new artist brand and it is facing the fact that another record label is also nearing the end of its development work of a similar kind of artist, the record label needs to consider, is it reasonable to enter the market first entry, parallel, or late.

3.5 The Way, How to Make Marketing-Mix Work Together The question the way or how, is related to tactical launch decisions. Within the music industry this question should give an answer to dilemma: what is the best way to launch an artist to the markets? The answer is: through profitable distribution channels and using intensive and clever promotion. Nevertheless, the question the way or how should be able to give answers also to next following features such as what is the importance of pricing, what distribution channels should be chosen, and what kind of promotion is the most efficient? These features are illustrated next in table 6 and described within following paragraphs.

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 Pricing

Way?

 Distribution  Marketing communications/Promotion

Table 6. Features of the question the way.

Pricing As stated in subchapter 2.3.2, pricing is the marketing method that enables revenues for a company. Other elements of marketing mix waste company‟s resources. Therefore, pricing should be an important factor. In music industry, it seems that it is quite hard to put a price tag to an artist. As stated in subchapter 2.3.2, when launching a product, the price is an element integral to its appeal or lack of appeal. Is the case then that the quality of artists is lower than before and people are not willing to pay? Again, the change within the music industry has a role here. While records are not selling like in the 1980‟s and 1990‟s and there is an opportunity for people to stream music almost from everywhere (e.g. YouTube, MySpace, and Spotify) and for free, it certainly has had an impact of the price tag of an artist. It seems that when music industry started to change, the price tags of artists were ripped off. There are at least three reasons behind this: Music industry was not expecting the change, new technology offered the ease, and consumers took it for free. This happened partly by accident, while nobody even asked for it. In other words, fallen prices (free music), has stimulated the demand, but at the same time it has reduced the revenues of record labels and artists. Record labels are trying to save the situation now organizing their functions differently, but who will in the future take care of the artists and their price tags? Distribution For distribution decisions, artists need to figure out what is the wanted strategy, what is the target country, what is the genre (low-culture versus mainstream), and how to position oneself? Nevertheless, as it was stated within subchapter 2.3.3, distribution and the place where the actual goods exist are the linkage between the producer of a product and the customer or prospects. Without distribution, it is impossible to deliver the goods to ultimate user of the product. When launching a new product, it is vital to stimulate growth in a competitive market.

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Typically new products are introduced through multiple, competing sales channels. In Music industry these kinds of places are, for instance, iTunes, YouTube, MySpace, and Spotify. These different so-called non-exclusive channels enable the record companies and new artists to expose new music to prospects and potential fans. Different sales channels also provide the convenience for prospects and fans to listen to music and even purchase music through these alternative channels. As it was also stated in subchapter 2.3.3, to invest in distribution is highly important. When making investments, it is good to remember that distribution channels are usually possible to change only in the long run. Actually, this does not apply within the music industry as extensively than within some consumer trade industries where actual physical products are sold. Therefore, changing the places where to offer music does not take that much time. What comes to distribution and promotion, it is quite usual within the music industry that these two factors are seen side-by-side. Because artist‟s music at the same time promotes itself when it is distributed using different sales channels. What makes especially promotion and distribution challenging within the music industry is the gatekeepers. Gatekeepers decide what will be accepted within record labels production and what will be distributed to radios, TVs, and other media (Merimaa 2011). Nowadays, the Internet provides a chance to use different distribution channels and to promote an artist. As it is possible to compare to any other industry, what will be released within bigger perspective, need to be accepted by gatekeepers. As mentioned in subchapter 2.3.3, the Internet has changed drastically the balance of power among the consumers, retailers, distributors, manufactures, and service providers. This has happened also within the music industry. For instance, Spotify has been discussed to be one of the main ways to distribute and consume music in the future. Spotify is a Swedish music service and computer program, which is partly owned by the biggest record labels in the world. To be able to use Spotify, users need to sign up with the service, which further enables the users to listen to millions of songs just by paying a small monthly contribution. (Koskinen 2010.) For consumers it is an easy place to listen to music. Actually, Spotify is also very good place for labels and their new artists to distribute music and new releases, but the revenues and profitability especially for the artists are another mystery. The labels of course benefit at some level, while people are using it, through advertisements and income that people pay while using it (Järvi 2010). However, Spotify is not possible to use worldwide, it runs only in seven countries at the

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moment and it has faced many legal problems concerning copyrights (Koskinen 2010; Järvi 2010). In addition, there are several other similar music services, such as Qriocity and Grooveshark that have taken part in the competition of digital distribution (Koistinen 2011). Finally, it is good to remember that audience, prospects and fans, defines the success of an artist. Therefore, distribution channel decisions, how to reach the audience, have great importance for new artists. Sometimes, artists should use a distribution approach totally different from others. Unfortunately, as mentioned already in subchapter 2.3.3, history suggests that in general companies are not willing to change their old habits and they tend to stay with declining distribution networks for too long, which may be crucial for them. This applies also when considering artists and record labels and, actually, this has been seen already within the music industry after recent changes. Marketing communications/Promotion As stated in subchapter 2.3.4, marketers rely on conventional promotion methods as advertising, personal selling, and sales promotion when launching new products. These traditional marketing communication tools can be expensive and frequently not very effective in overcoming consumer resistance to new products. For instance, traditional advertising is seen as not that effective within the promotion strategy of a new artist (Kansi 2011; Merimaa 2011; Perämaa 2011; Valtanen 2011). Therefore, advertising can be seen as one option, but not in the phase of launch. Promoting and selling an artist differs from consumer trade by means that while the music is distributed, it also at the same time promotes the music and itself the artist brand. To make sure that prospects and potential fans are able to hear about new artists, all the marketing communications in the stage of launch need to be integrated. Therefore, each used promotion tool should have a specific task. Further, it could be stated that the levels of effort in both selling and promotion determine the success of the new artist. As stated in subchapter 2.3.4, the importance of promotion is to communicate with consumers. While music consumption and producing is increasing and there are lots of different distribution channels where to choose from, still, people do not know where to look, if promotion is not contributed correctly.

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3.6 Win, Successful New Artist Performance The performance of an artist will determine the success, win, or the failure, loss, of the artist product or brand (see table 7).

Win!

 Win  Loss

Table 7. Features of the conclusion win.

As stated in chapter 2.4, the commercial success or failure of a product does not rest solely on the product itself. There exist strategic and tactical launch decisions that have impact on the performance of the launched product. These have been discussed above within chapters 3.1.-3.5. As also stated in chapter 2.4, Hultink et al. (1997: 247) divide the product performance to four different categories: overall performance, customerdetermined performance, financial performance, and technical performance. All these attributes are possible to be seen also within the music industry. However, one exception still exists; the term „technological performance‟ here could be changed into a term „musical performance‟. In fact, all the most successful artists and bands in the world need to fulfill these requirements. It is obvious that a successful artist needs to be appealing through personal characteristics and able to reach potential customers, in other words, fans. However, an artist needs to realize that he or she is not able to satisfy everyone‟s needs. Secondly, the successful artist needs to have financial resources, whether he or she is willing to perform in domestic markets or international markets. Thirdly, the successful artist‟s music needs to be appealing and good. Finally, if these previous three features are achieved, it might be possible to discuss about successful performance and being a winner in the target markets. In other cases, it is obvious that failure or loss is predictable. Win As seen above and it was stated in chapter 2.4, the performance of a new artist is crucial both to what kind of targeting has been done and how the product meets the customer requirements, competition, itself the development and launch process, and effective internal preparations. The decision, which markets to enter, determines also what kind of success is possible to pursue. In chapter 2.4, there were two kinds of targeting possibilities: niche targeting and mass targeting. Within the terms of economics, indie

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and low culture music could be seen as niche markets and mainstream music could be seen, on the other hand, as mass markets. Goal setting is another important factor while reaching successful overall performance. It was stated in chapter 2.4 that success or failure is possible to measure through goals and objectives both in short-term and long-term performance. For instance, Finnish Rock band, Poets of the Fall, is successful both in Finland and abroad. The launch of the band and success afterwards is based on music within computer game Max Payne. According to Juntunen‟s (2008: 105) article, the band had quite clear goals right from the start. In the article, the singer of the band, Marko Saaresto, argues that Poets of the Fall has had always strong beliefs and plans what to do next. Actually nowadays, the band is even more successful and already releasing their collection album. Gene Simmons, the bass player and singer of one of the world‟s most known rock bands, KISS, argues in Sylvie Simmons article the band‟s strategy for success as follows (2010: 36): “Ask and you will receive.” Of course, Kiss has had a big record label behind the band. Good team, organization, or record label is presumably one of the most important actors towards success. As stated in chapter 2.4, a company must be able to master product strategy and efficiently navigate through proper development, and application and management of a product strategy that separates success from failure. Therefore, it is predictable that the corporate mind-set has strong impact on success also within the music industry. While the industry has shattered within last ten or so years, this has brought new challenges for companies to sign and release new artists. Nowadays, an artist cannot anymore ask and he or she will instantly receive. The risk-taking ability has decreased quite relatively and that has had straight impact on how many artists will have even a chance to test the mass market and further a chance to be successful. Loss As stated in subchapter 2.4.1, recently different studies have consistently revealed high failure rates for new products. This is also everyday routine for new upcoming artists. One reason behind this is the oversupply within markets – there is not room for everyone. Whether the artist will be able to perform within the mainstream markets, it needs to pass the gate of gatekeepers (Valtanen 2011; Merimaa 2011). Actually, these gatekeepers are good to exist, because of the oversupply. Therefore, it is obvious that not every new artist will break through; simply, there is just not enough room for all.

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Not every loss is depended on the artist itself. Therefore, are the record labels developing pragmatic, monitored and flexible launch programs? As stated in subchapter 2.4.2, the most common reasons why products fail are due to such fixable factors as: poor understanding of consumer needs, lack of competitive analysis, lack of understanding of distribution issues, lack of up-front planning, and poor crossfunctional communication. This might be the case also within the music industry. As also stated previously, the consumer is the key to success. It is obvious that within music business it is not possible to survive without fans. Therefore, to avoid loss and failure, an artist and his or her background organization should take into consideration that if the new artist is not capable of offering a value to the potential fans, it is presumable that the artist will not perform well after the launch and her or she will at some point fail. In addition, what especially record labels could concern is that, if there is unwillingness to learn from previous launch mistakes, it is presumable that the same mistakes are going to be repeated while launching other new artists (See subchapter 2.4.2).

3.7 Theoretical Framework It is possible to form theoretical framework of 6W‟s based on previous studies and what has been discussed previously during the whole chapter 3. The six W‟s in the model are based on questions: why, what, where, when, the way, and a conclusion – win. Question why, is the basis for the new artist launch. Question what defines the features of an artist. Question where is needed to solve target markets and target prospects. Question when determine timing decisions. Question the way defines the required pricing, distribution, and promotion decisions. The conclusion for these previous five questions is to win, the actual performance. Of course, result might also turn into failure or loss, but win is the situation that is pursued. In next table 8, it is possible to see the basic features for the theoretical framework.

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Why?

What?

Where?

When?

Way? Win!

 Artist idea  Company behind an artist  Company strategy  Goal setting  Towards domestic or international markets  Music industry environment An artist is a product  Characteristics of an artist  Differentiation  Positioning  Artist brand and key characteristics of an artist  Novelty of an artist  Market analysis  Target market and segmentation  Target prospects and fans  Market demand  Creating new market space, blue oceans  Competitive advantage  Market-entry timing  Early or late starter  Pricing  Distribution  Marketing communications/Promotion  Win  Loss

Table 8. Summarized table of 6W‟s.

The theoretical model is possible to see as a certain learning process, where the information grows after every answered question. The pursued result is the success or win, which is only possible to achieve, if the process has been planned, developed, and established pragmatically and all the phases of the process have been monitored. It is possible to see in the figure 3 that the launch decisions have same basic questions always, but how to reach the goal, win, it might vary quite extensively. Theoretical framework is illustrated next in figure 3.

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WIN! WAY? WHEN? WHERE? WHAT? WHY?

Figure 3. Theoretical Framework of 6W‟s.

The questions of why, what, where, when, and the way and the result win, has been discussed quite extensively earlier in this study. However, it is good to describe the importance of each step. Step one answer the question why. It is the basis of all activities, while starting to plan itself the launch. Step two answers the question what. It is important because through that step itself the product or brand needs to be identified. Step three answers the question where. It is highly important, because during this step it needs to be at the latest decided what the target markets, domestic or international, are and what kind of fans are tried to be reached. Step four and five answer questions when and the way (or how). These steps can be processed together, because timing is closely related to especially distribution and promotion decisions. Last step is the conclusion and actual performance. While standing on this step, a product or brand needs to be ready for the challenging markets. The purpose of this model above is to classify the empirical findings, which has been collected through interviews. This model of 6W‟s is used to analyze the findings and results in chapter 5 and to describe the importance of launch decisions of an artist more specifically.

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4. RESEARCH METHODOLOGY

4.1 Research Approach The research question is the basis of what kind of data should be gathered and also what kind of method should be used for analyzing this data (Uusitalo 1991: 79; Yin 2003: 5). In general, the research approach may be quantitative or qualitative. The difference between these two is that what kind of knowledge they seek from the data. Quantitative approach seeks causes and explanations (Stake 1995: 37), while qualitative approach is more interested in searching for different happenings and phenomena (Tuomi & Sarajärvi 2002: 87). This study will be conducted as a qualitative research and it concentrates on collecting qualitative data. The most common methods for qualitative data collection are interviews, questionnaires, observation and exploring data that are based on different documents (Tuomi & Sarajärvi 2002: 73). While this study seeks to interpret and understand the researched phenomenon, this study will be conducted as a qualitative research. Uusitalo (1991: 79-80) defines a qualitative research as follows: “A qualitative research is a study in which the research evidence is verbal or visual, whereas, in a quantitative research the evidence is presented in a statistical form.” Kiviniemi (2007: 70) describes a qualitative research approach slightly differently – as a process: “The development of the research process cannot be in advance divided into clear stages, while the problems related to the research problem or collection of data are not resolved at beginning of the research but rather in an incremental manner along the process.” In other words, a qualitative research can be seen as a series of problems to be solved. According to Eskola and Vastamäki (2007: 19) the primary aim of a qualitative research is to highlight the personal interpretations of the researched individuals. A qualitative research sets out to describe real phenomenon and provide a holistic picture of the researched subject (Uusitalo 1991:80). Qualitative research approach produces complex and in-depth research evidence. The theoretical framework determines how to collect the data and the method of analysis. In other words, the purpose is to collect the data to represent the previous theory and to reveal the main problems regarding the researched theme. A qualitative research sets out to develop theory and the different stages in the research process are closely connected to each other (Uusitalo 1991: 80-81). People are often used as a source of information, because data need to be collected in a

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comprehensive way in natural situations (Hirsjärvi, Remes & Sajavaara 1997: 165). The data in this study is gathered from a group of people, which is selected by means to give as accurate data as possible. This study applies a hermeneutic understanding on research because the aim of the study is to understand and reveal what has happened in the real-life and to compare it to the previous literature. Through comparing real-life and literature it is possible to increase the understanding of the phenomenon (Laine 2007: 31-32). Hermeneutist methodology puts a strong emphasis on experimental knowledge and understanding of events. It perceives events in a holistic way, taking into consideration the context and history of the events. Therefore, hermeneutic understanding has two key elements: preunderstanding and the spiral of hermeneutics. An understanding involves always interpretation and the prerequisite for understanding as earlier learned and understood. A pre-understanding gives us guidelines to further understanding. This leads to a circle of learning, which creates a so-called spiral of hermeneutic. (Tuomi & Sarajärvi 2002: 35.)

4.2 Research Strategy As stated in previous chapter, the most common methods for qualitative data collection are interviews, questionnaires, observation and exploring data that are based on different documents (Tuomi & Sarajärvi 2002: 73). In this study itself the research strategy is based on mainly interviews. However, the data will be collected also through exploring knowledge that is based on different documents and literature. The concept of interviews is quite straightforward. When we want to know what people think and feel, we ask it from them (Tuomi & Sarajärvi 2002: 74). Still, studies, which are based on interviews or questionnaires, have been criticized (Tuomi & Sarajärvi 2002: 74; Hirsjärvi & Hurme 2008: 35). The criticism is focused on the problems such as interviewers training, funding, and experience, which is based on more or less understanding of the subject. These problems are mainly methodological. It is good to separate interviews and questionnaires from each other. Still, radical separation is not perhaps reasonable. However, through interview it is possible to present the questions verbally straight to the interviewee. Simultaneously the interviewer is able whether to record or write down the answers. Through questionnaire,

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on the other hand, it is possible to distribute a question form straight to the interviewee. He or she is then able to answer the questionnaire whether in closed event or at home. The advantage of an interview is foremost flexibility. For instance, through an interview it is possible to collect the wanted data in unspecified order and to repeat the questions if needed. (Tuomi & Sarajärvi 2002: 75.) Different authors give different meanings to the forms of interviews (Hirsjärvi & Hurme 2008: 43). Therefore, it is important to classify different types of interviews. In general, interviews can be divided into three forms based on the level of formality and structure. According to Tuomi and Sarajärvi (2002: 76-78) interviews can be described as surveys, focused, or in-depth interviews. In contrast, Hirsjärvi and Hurme (2008: 44-48) refer to the three different forms of interviews as surveys, structured, unstructured interviews. Technically these three forms of interviews differ from each other through the level of how structured the interview questions are when they are compared to the theory of the study (Tuomi & Sarajärvi 2002: 76). In other word, differentiations can be perceived when observing how attached to the theory the questions are formulated and how much interviewer classifies the situation (Hirsjärvi & Hurme 2008: 43). Surveys Surveys are based on predetermined and standardized or identical set of questions (Hirsjärvi & Hurme 2008: 44). Therefore, it is not suitable to ask whatever what would be nice to know through surveys. Because the surveys are mainly used to collect quantitative data, they are also referred to as quantitative research interviews (Tuomi & Sarajärvi 2002: 77). Semi-structured interviews Semi-structured interviews can be separated into the focused interviews and structured interviews (Hirsjärvi & Hurme 2008: 47). There is no one single definition for this type of interviews. In semi-structured interviews the researcher will have a list of themes and questions to be covered, however, it is possible that the themes and questions wary from interview to interview. The order of questions may also wary depending on the flow of the conversation. In addition, additional questions during the interview may be needed in order to explore the research questions and objectives. (Tuomi & Sarajärvi 2002: 77; Hirsjärvi & Hurme 2008: 44.) Semi-structured interview is especially useful when the framework has been built before the interviews and the chosen themes are based on this framework (Tuomi & Sarajärvi 2002: 77-78).

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Unstructured interviews When comparing in-depth interviews and surveys, in-depth or unstructured interviews are more informal (Tuomi & Sarajärvi 2002: 78). According to Seidman (1991: 9) the purpose of unstructured interview is to get the interviewee to discuss and reconstruct his or her feelings about the subject of the research. Therefore, there is no predetermined list of questions to go through in the interview (Hirsjärvi & Hurme 2008: 45), only the phenomenon is determined (Tuomi & Sarajärvi 2002: 78). The interviewee is able to talk about different events, beliefs and behavior related to the researched phenomenon. The role of the interviewer is then to deepen the answers. The data collection of this study was conducted through the middle form of semistructured and unstructured interviews while the theme and phenomenon acquire more open-discuss. Altogether nine interviews were achieved. Through the middle form of semi-structured and unstructured interviews, it was possible to collect as accurate information and data as possible.

4.3 Research Process The theoretical data analyzed and processed in this study is based on different articles and literature concerning product launch. There appeared straight links between different studies. Therefore, it was relatively obvious how the proposed model should be created. The empirical data collected and analyzed in the research included both primary information and secondary data. Primary data were collected by means of semistructured interviews with music industry professionals Secondary data, on the other hand, were collected from different media and music industry related articles and literature. Finally, as stated also previously, nine people were interviewed during fall 2010 in Los Angeles, USA and winter 2011 in Helsinki region, Finland. Each interview lasted approximately from half an hour to one and a half hour. All these interviews were taperecorded with mp3 -recorder. The author himself is also actively involved with the music industry, which ensures that the data, language and terms within the industry are well understood. The author also has an own band called Lost Frame.

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To conduct this study, especially the empirical side, was challenging. It seemed to be an impossible task to take contact with music industry professionals. As stated in the study, business within the music industry is based on partnerships and that was also seen when booking interviews. The purpose at first was to make more interviews abroad, but to contact record label executives and other industry people proved to be too challenging. As mentioned above, only two of the interviews were Five out of nine interviews were settled through personal relations.

4.4 Method of Data Analysis The basic method of data analysis in this study is content analysis. Through content analysis, it is possible to build up and analyze different kinds of studies systematically and objectively (Tuomi & Sarajärvi 2009: 91, 103.) However, content analysis has also faced criticism. While using content analysis, it is more important to make meaningful conclusions than just to describe the analyzed data. Content analysis should be seen as a process. The process includes determination, different decisions, active processing of the data, and etc. Finnish researcher Timo Laine (in Tuomi & Sarajärvi 2009: 92) has described one way to accomplish content analysis. His model has six phases. First, decide what is interesting in this data. Second, go through the data, divide and mark the things that are possible to include in the study. Third, leave everything extra out! Fourth, collect the marked data together. Fifth, classify, create themes, or type the data collected. Finally, make a summary. (Tuomi & Sarajärvi 2009: 91.) There are three types of analysis: data-driven analysis, theory-guiding analysis, and theory-driven analysis (Tuomi & Sarajärvi 2009: 95-98). In data-driven analysis the aim is to create theoretical body, which is based on empirical findings. In theory-guiding analysis the aim is to solve problems through using theory-based connections. In other words, problems are not solved through using theory. Theory can be used as a helping tool when making the analysis. In theory-driven analysis empirical findings are connected to certain theory or model. Theory-driven analysis model is more common than data-driven. For these three, it is possible to use either inductive, abductive, or deductive reasoning. Inductive reasoning is based on a conception that individual beliefs are turned to be a general belief or theory. Deductive reasoning is opposite to inductive reasoning. Abductive reasoning differs from these two. Abductive reasoning is based on

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a conception that it is only possible to create a new theory, when behind observations exist a thread or leading clue. (Tuomi & Sarajärvi 2009: 95-95.) This study‟s empirical part is based on content analysis. Further, study is more theoryguiding analysis than data- or theory driven. Inductive reasoning can be seen in this study as a supporting role. Through these two chosen analysis methods, the study was possible to complete through exploring, researching, and comparing the data of individual interviews to the previous models and theories. Itself the content analysis process was conducted as follows: contributing the interviews, listening and writing the interviews, reading and orientating to the interviews, selecting and underlining the most important phrases, listing the reduced phrases, making individual tables according to the phrases, classifying phrases under different classes, finding similarities, and forming a model based on theoretical model and findings.

4.5 Credibility There is no single guideline that could show the importance of which tools should be used when evaluating trustworthiness of the study (Tuomi & Sarajärvi 2009: 140). In the literature of research methods‟, trustworthiness is evaluated usually through validity and reliability (Uusitalo 1991: 84-86; Tuomi & Sarajärvi 2009: 136). Validity refers to the use of correct operational measures for the concepts being studied. Reliability, on the other hand, refers to the operations of the study, such as data collection process, which need to be able to repeat with the same results. According to Tuomi and Sarajärvi (2009: 137-139), these terms are developed through quantitative studies and, therefore, they should be forgotten and replaced with terms such as credibility, transferability, dependability, and confirm ability. Firstly, credibility refers to the study‟s reliability and adequacy. Secondly transferability refers to the study‟s portability. Thirdly, dependability refers to the study‟s research situation assessment, certainty, and reliance. Fourthly, confirm ability refers to the study‟s stability and confirm ability This study is evaluated through term credibility. The credibility of this study is almost at the highest level both theoretically and empirically. From theoretical point of view, the proposed model of 6W‟s is based on previous studies concerning strategic and tactical

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new product launch decisions and the performance of the new product. From empirical view, all the interviews are contributed with the music industry professionals.

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5. EMPIRICAL FINDINGS In this chapter the results of the empirical study are presented and analyzed. The findings, results and the analysis of the study are divided into subchapters within chapters 5.2 and 5.3.

5.1 Goals of the Interview Study The importance of this chapter is to describe and specify the results of content analysis, which is based on nine interviews. As stated in chapter 1.2, the main empirical objective is to investigate those key strategic and tactical decisions or elements of an artist and further how to launch an artist. The second empirical objective is to define how strategic and tactical launch decisions are related to the market performance of an artist. To achieve this, it is possible to use the theoretical framework of 6W‟s as a tool, which describes the importance of launch decisions. Content analysis started from the interviews, which were first held during October 2010 and January-February 2011. These interviews were based on open-ended questions that can be seen in appendix 1. Itself the content analysis part was succeeded as follows: first all the recorded interviews were transcript to separate documents. After the transcribing process, all the comments were processed through few steps, including translation process from Finnish to English, to their abbreviated form. When all the answers were divided, it was possible to transform the abbreviated comments to right sections within theoretical framework of 6W‟s. After that it was possible to form findings and results. All the nine professionals that were interviewed were selected from different areas of the music industry. All together there were two record label representatives, one promotion company representative, one music export company representative, one music producer, one concert arranger, one media house chief, one image and publicity coordinator, and one music journalist. Even though they were chosen from different fields of business, as a whole they can presumably show the importance of what kind of launch decisions are the most important to take under consideration during the launch process of a new artist. Within next chapter 5.2 and 5.3, the purpose is to describe and illustrate the comments of the interviewed, findings and results.

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5.2 Launch Decisions Commented by Music Industry Professionals 5.2.1 Record labels For this study were interviewed two music industry professionals from two different mainstream record labels. These were Jouni Perämaa from Warner Music Finland and Kimmo Valtanen from Sony Music Finland. Marketing manager of Warner Music Finland Jouni Perämaa has had extensively long work career within the music industry. Perämaa has worked as Marketing Director for domestic artists in Poko Records (Finland), and as Marketing and Promotion Executive both for international and domestic artists within Warner Music Finland. Currently his position is to take care of marketing and coordination of Warner Music Finland‟s sister labels distribution. He has also personal music and band background. Interview with him took for one hour at Warner Music Finland‟s head office in Helsinki, Finland. Abbreviated comments of Mr. Perämaa are illustrated next in table 9.

FEATURE W Artist Idea H Y Company Behind an Artist

Company Strategy

Goal Setting

International or domestic markets

ABBREVIATED COMMENT

FINDING

 A new artist develops individually  Artists are signed at different levels of their life-cycle  It is not common that an artist would be ready to the markets at the stage when he or she is signed to a label  Artists are found through demo -tapes and performs

Artists develop differently and record labels usually sign new artists during their development Roles what artists do and what record labels do, should be justified and clear Nowadays the requirement for record labels is to be multitalented organizations that are able to commercialize new artists efficiently

 For labels it is important to be active and ready to receive information about new potential artists  Record labels have supportive role for artists when considering branding and marketing, organizing tours, etc. Artists should be able to concentrate just on making music and perform  360° -model is the strategy of Warner in the future. For instance, Warner takes care of artists branding, marketing and promotion, recordings, releases, concerts, and publishing. Tickets and album selling are outsourced.  Company strategy involves controlling and commercializing of artist brands. The most important task is to brighten those characteristics, image and brand that already exist in our artists  Cash flow is always depended on how the artists will success. Nowadays those flows are getting smaller and smaller all the time, therefore, it is important that we are able to find those affordable ways to do business both from the point of view of the artist and the label  There are also different artists with different goals. The smaller the goals are, we don‟t need to predict, demand, and invest in that particular artist that much  We need to be able to trust that our new artists has the best potential substance  When considering pop and rock music, it is no use to go to the international markets, if the artist has not reached awareness in Finland  While we are international company, even the company‟s internal competition is tough. We are basically forced to decide which artists to concentrate and invest  Low culture music and genres work differently

Goal settings and objectives of different artists vary a lot A new mainstream artist needs to be first successful within domestic markets

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Music Industry Environment

W An Artist is a H Product A Differentiation T

Positioning

 We sell an idea of something  Artists need to be able to connect in the minds of people  The image together with music is important

Brand and key characteristics of an artist

 The most important things for new artists are to understand that the music and the quality of music is good, artist possesses charisma, and the story behind the artist is appealing,  There are things that are possible to teach, but talent and charisma need to exist  An artist needs to also have desire, and especially, focused desire. Too often people have desire but they don‟t know what they really want. These kinds of cases are also seen in programs like Idols etc.  Authenticity is also one really important matter. He or she needs to be able to create deep feelings  MUSE –example: “MUSE had already accomplished three albums before the band was signed to Warner. At that point MUSE had already visit and performed in Finland and also given some interviews. After the band was signed to Warner, they released the big radio hit “Time is running out” and that actually was MUSE’s breakthrough point to be even better known than before. Then they made few gigs here and people really took them as their own and that was it.”  We should do more research about our artists and their images  We cannot study and research our artists like the car industry  We do get information about where the potential fans of our artists are for instance through Facebook and other social media. That knowledge we can utilize in touring  We choose and go through always the potential target market together with our new artists  It is important to know first what the potential market is. After that it is possible to improve our artists weaknesses and strengths  Our A&R (artist and repertoire) choose and go through always the potential target prospects and fans together with our new artists  We need to know is our new artist appealing enough to his or her potential fans, after that it is only possible to launch the artist  Nowadays consumers do not commit to an artist as they used to  Music is consumed now more than ever

Novelty of an Artist

W H E R E

 The situation within the industry is better than 4-5 years ago  We were not ready to bring new ways to consume music already ten years ago  Now, we have been able to create models to consumers that are interesting and easy to use  Changes so far have not rescued the losses and the industry yet  Revenues still are not in that level that they were before  Hopefully the bottom  We all humans are products at some extend  For some reason, the word product is something that I try to avoid when speaking about an artist, because in the end we are talking about humans and creative arts  Differentiation is quite hard to accomplish, because our product is always unique  We always try to find something new from our artists that would differ from other similar. Sometimes it might be even very small things concerning looks, etc.

Market Analysis

Target Market and Segmentation Target Prospects and Fans

Market Demand Creating New Market space

W Competitive H Advantage E N Market-Entry Timing

Early or Late Starter

Ways how to make business and create new market spaces are under constant search We need to find constantly new ways how to bring music to consumers Benchmarking is also important factor, because through that we can improve our own activities  We need to recognize what other labels are doing at the same time  When launching an international phenomenon, sometimes it may take even one year. We need to find the right gap for achieving the competitive advantage. In other words while the package would be ready, we need to wait the right time  The best time to launch a new artist is definitely spring  In spring there is more room in the media  It seems that even gatekeepers are more open for new artists also during spring  And to be able to play in the biggest summer festivals, a new artist must release his or her songs during spring  If we get bigger star from abroad that has achieved international success at some level, then we need to be ready to launch him or her sometimes even quite quickly in Finnish markets  Christmas is definitely for those artists that are known beforehand  At the stage of commercialization, it is important to know what is coming up at the same time from other labels  We don‟t shout to other labels what kind of an artist we are going to release next  We need to be ready all the time, because when it is time to launch a new artist, we cannot be late from that moment

The industry is doing better than 4-5 years ago and new legal models to consume music have been developed An artist is a product It is possible to accomplish through alternative sales channels and external features An artist is needed to be able to connect in people‟s mind Brand needs to be built through good music, charisma, story, focused desire, and authenticity

Usually artists are developed little by little and international success does not come right away There exists only little research about artists and their images Target markets are decided both by artists and their labels Fans determine the new artist‟s success

Demand is high It is hard to find blue oceans, but record labels still search for them It is a must to keep eyes open

Market-entry time needs to be affiliated to springtime

It is useless to launch similar artist at the same time

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W Pricing A Y Distribution

Promotion

W Win I N Loss

 The way how to get money through our products is hard nowadays  Nowadays consumers do not see there anything wrong that they download free  Recordings has reached average price  Declining the price to achieve better listing rates produce more gigs to our artists  Retail stores make the last decision of record‟s actual price  Lower recording price, higher gig price  Those channels where the prospect hear the first time about new artist are important  Within mainstream music the radio is the most important distribution channel  It is much easier to play a song in radio than distribute it through Facebook or other social media  At some target markets it is important to play also in TV within different events  Retail stores are still important to us  It is sad that there are no longer special music record shops; those has always been a good way to bring out a new artist  Touring and festivals are important  Promotion needs to be built by means that it is credible for potential fans  If we think that people first time hears about the new artist through tabloid magazine or music magazine, it has a great importance  We need to make the process in a way that we first reach potential fans and media, which at the same time creates the credibility for the new artist  Good plan has an important role. Especially, with international stars who are already well known, we make quite specific plan how to promote he or she  This business is based on partnerships  Internet is important also by means that for an artist it is important to be able to get to the traditional media houses webpages and get your music video played in there too  People do find new music through Internet, but first they need to hear about it from somewhere else  Social media is coming more and more important all the time and it is a good way how to deepen the relationship between artist and potential fans, but to create the same kind of promotion than it is possible to reach through radio play, it is still relatively weak  Radio is vital  Music video is also one good tool, because through it is possible to see the artist or the story behind the song  Advertising is only important when the artist has reached success at some level. Through ads it is possible to show where it is possible to hear the music of an artist  In-store promotion has been important before, but nowadays it is almost impossible to get those stands in the retail stores  Street teams have also significant role, because they do important publicity work for the new artist  Sponsorship is also becoming one of the biggest things in artist promotion. Good example, for instance, was Golden Gap and the Baseball last year. In sponsorships it is good to remember that the products need to be alike and support each other  In the end, it is all about the artist and the songs. Without a good song, it is not possible be successful  In the future, it is important that the music is important for the artist that plays it The song can be cover song too, but it needs to be related to the artist. An artist always need to able to directly share his or her feelings with the audience  No mention during interview

Consumers are not willing to pay about artists physical goods anymore Radio, TV, Retail stores, and festivals are good distribution channels for artists

Good marketing communication tools are music magazines, partnerships, Internet and social media, music videos, street teams, and sponsorships

Good songs and ability to share his or her feelings

No findings

Table 9. Comments of Jouni Perämaa and achieved findings.

Another interviewed record label professional was Kimmo Valtanen. He has been the CEO of Sony Music Finland since the end of year 2004. Before taking over as the CEO, Valtanen has worked as Marketing Director for international artists and as coordinator of digital music of domestic and international artists at BMG, which used to be part of Sony Music Corporation. He has also personal music and band background. Interview with him took for 35 minutes at Sony Music Finland‟s head office in Espoo, Finland. Abbreviated comments of Mr. Valtanen are illustrated next in table 10.

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W H Y

FEATURE

ABBREVIATED COMMENT

FINDING

Artist Idea

 It is important to take under consideration and discuss the desire, vision and potential export battle together with the artist  It is good to define what is realism and not

Company Behind an Artist

 We have important role and together with the artist and marketing team, it is possible to define where the artist has potential to succeed  Gatekeepers have also important role when building the artist brand  We need to find these so called champions that could be able to act as messengers and that would help an artist to grow and expand further in the process at the stage of launch  Without these so called champions the chance to break through is almost impossible  Nowadays, if labels want to grow, they need to grow through services. These services are for instance LIVE and touring, merchandize, some may have publishing, and other similar that have an impact and are involved to potential earnings of an artist  Good thing nowadays is that we are able to offer almost everything that is possible to attach to an artist. It enhances the efficiency to operate in many ways  In the future, those labels and companies will survive, who have the ability to be the best partner for an artist by creating him or her the best possible added value  Our task as a company is to find the most potential artists and take them further towards prospects within this extremely challenging market  The most important thing is to be able to identify the realistic potential to succeed, both in domestic and international markets  Budgets need to be also realistic, and budgets therefore need to be set phase by phase. ROI is the key, if we are able to reach step one and two, then we can take the third step etc. It is the most realistic model in these days in order to survive  The markets are extremely challenging abroad  Realism and moderate investments are important towards international markets  We need to be able to get results first in Finland. Through this process and certain market test, we are able to get competitive product and avoid some financial risks  If we want to release a new artist to international markets, he or she really needs to be something exceptional  Music industry has been and is going through a massive change  Within last ten years, actual recording business has declined to half  At the same time digital business is growing

It is important to define desire and vision through realism Record labels, gatekeepers and so called champions are vital for new artist‟s performance Nowadays the requirement for record labels is to be multitalented organizations that are able to commercialize new artists efficiently Goals need to be set through realism and ROI

Company Strategy

Goal Setting

International or domestic markets

Music Industry Environment

W H A T

An Artist is a Product Differentiation Positioning Brand and key characteristics of an artist

Novelty of an Artist Market Analysis

W H E R E Target Market and Segmentation

 Whether it is a consumer product or an artist, but when it is commercialized, it is always a product  It is always about the brand or the image whether it is good or bad  No mention during interview  No mention during interview  Music is always the basis  Then there are all the external factors such as personality, looks, and the ability to cooperate  Important factors for a successful artist brand is itself the product, desire, style, and story  No mention during interview  We can always study and research artists from different aspects, usually, the research and study are based on our own qualitative analysis within our company. In other words, our professionals listen to potential new music  Commercial radios accomplish extensive research about consumers and their music taste etc.  Target markets and the decision to move forward are given through certain gatekeepers  We need to get the product, story, context, and content as good as possible in gatekeepers‟ minds

Target Prospects and Fans

 The process starts from the setup phase (R&D)  All that matter is to build and design a product that appeals to gatekeepers and potential fans  Prospects and fans take it as their own, if the content and context is appealing

Market Demand Creating New Market space

 There obtains the status of oversupply in the music markets  Artists and their music are competing against local and global music all the time  Optional ways to create new market spaces are looked for at some extent for both artists and record labels

W Competitive Advantage

 A new artist needs to be able to create a product that speaks for itself and at the same time is better than the competitors‟

A new mainstream artist needs to be first successful within domestic markets Changes in the industry have had impact on the music sales An artist is a product No findings No findings Artist brand needs to be built through good music, personality, style, desire, and story No findings Mainstream radio channels accomplish extensive research Who gets where and in which markets are decided by gatekeepers Fans and gatekeepers determine the new artist‟s success Oversupply New market spaces are possible to find Product needs to be unique

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H E N W A Y

Market-Entry Timing

 It is not that time-sensitive at annual level. It is more sensitive at the current time and trends and also what kind of other stuff is on the market

Early or Late Starter Pricing

 No mention during interview

Distribution

Promotion

W Win I N

Loss

 In a way, price does not have anything to do with an artist  Price is possible to use as a marketing tool, but within this industry then we are talking about doing things for free  Local retail stores decide what the actual price of certain product or recording is  Price is useless to set, if the product is not interesting and if also context and content is not appealing  People are used to get music for free; therefore, actual price is a poor tool  YouTube is good tool to take the message and spread the music further  Radio and other places where it is possible to distribute music efficiently are important  Facebook is extremely important tool and together with services like Spotify, it is possible to generate even more plays for an artist  It is important for us that we can describe and promote our products through three sentences  Wanted and created message should be able to deliver in different media and through different actors  Facebook is extremely important tool and together with Spotify, it is possible to generate even more plays for an artist  Advertising for new artists is the last that we consider. We need to be first able to get the artist known from through other marketing communications channels  The image and story about the artist and his or her music is important factor  Best actors, partnerships, and artists will in the future perform excellently  If the music and story behind the music speaks in current moment, then the artist has a chance to be successful. Then it is classic hit-business  Desire to do the thing is crucial  Of course an artist needs to be excellent in his or her own genre  In the future, those artists that are able to make hit-singles and good individual releases and songs will probably have better chances to survive and breakthrough  Through albums it is harder and harder to breakthrough nowadays because the recording business is declining all the time  Idols –example: ”There has been seen good examples for instance in Idols that new artists has arisen through the format, but if the artist has not really wanted to make the job what being an artist requires, then the career has ended long-before it should have.”

Market entry is not time-sensitive if the product is good enough No findings “Pricing” of an artist is not efficient marketing tool if the artist is not interesting YouTube, Spotify and radio are good distribution channels for new artists Good marketing communication tools are different traditional media, Internet and social media, and Spotify or similar Image, story, partnerships, the music itself, desire, excellence, and single releases

Heavily concentrating on album releases and unwillingness to be involved within this industry

Table 10. Comments of Kimmo Valtanen and achieved findings.

5.2.2 Promotion company For this study was interviewed one promotion company representative, Jon Lieberberg from Live Nation. Mr. Lieberberg works in the promotion company as a Director of International Touring. While studying in the beginning of the 21st century, Lieberberg had internships both with Sony Music and Universal Music. He has worked his way up to becoming as a promoter and through booking his own shows. In his current position he had worked for four years. Interview with him took for one hour at Live Nation‟s head office in Beverly Hills/Los Angeles, USA. Abbreviated comments of Mr. Lieberberg are illustrated next in table 11.

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FEATURE W Artist Idea H Y Company Behind an Artist

ABBREVIATED COMMENT

FINDING

 The artist or the band needs to tour couple of years, build a fan base actively  American Idol and similar shows sometimes gets its right and sometimes they don‟t  An artist eventually has to formulate a business plan  Any band or artist, which are really good, will eventually come through  There are the indie labels and the major/mainstream labels  Eventually, info about the artist is going to land on my desk or anybody else‟s desk

New artist needs to work hard to reach attention

Company Strategy

 Vertically integrated 360° -model suites for Live Nation  It is possible that the album is made in our house and we control the marketing. We have a chance to license it to a label, because they know how to distribute the album, they have the channels. We basically push the album into the markets and they distribute it, and that is what they and we know the best.  The model how to sign an artist has not changed

Goal Setting International or domestic markets

 No mention during interview  Everyone in this industry has their own network tipsters  There is a limit to a new artists growth without a record label

Music Industry Environment

 Every major company in these days is based on volumes  There is a thin line in the music industry between integrity and making money  The same people have been running the labels for 20-30 years and they are getting out of touch. People resist change  Everything you see / hear in mainstream radio or media control charts is very formulated, very manufactured  In the last five or ten years, we have seen major shifts how to consume music. So, there has been a paradigm shift from physical CD to digital download  Five years from now, it is going to be a new world out there and I think there will be exciting times ahead of us in the music industry  There are artists that are manufactured from their label and presented by their management as a product  Artists are manufactured like products within mainstream. However, you cannot generalize it to every artist, for instance, low-culture artists are different

W An Artist is a H Product A T Differentiation

 Everything is done in the red oceans within mainstream There are lots of incredible artists for instance in the indie level, which do it in the other way when compared to mainstream. They almost reverse that system

Positioning

 Everyone has their own taste

Brand and key characteristics of an artist Novelty of an Artist Market Analysis

 Good attitude to keep the integrity high  An artist needs to keep it real, tasteful, and stylish as long as he or she can

W H E R E Target Market and Segmentation

 No mention during interview  Music consumption in these days is fast  Internet has revolutionized the process of consuming music. Sometimes people are finding it difficult to find their interest, because they have so much access through Internet  The markets are fragmented  Some artists kill the market and push everybody else away from their way  Him –example: HIM, coming out from Finland. Next thing you know, the guys have global fan base that speaks for some kind of movement and then next thing you know Bam Margera from Jackass is pushing them and they get bigger and bigger  Now it is all about the individuals. It is almost like the end of collective culture  You need to give that little push that you even know that it exists

There are different ways how to organize activities Companies such as record labels and promotion companies need to cooperate during the launch to achieve better results No findings Music determines the potential to international markets Because times have changed there is demand for new ways how to run the business

Especially, mainstream artists are manufactured like products New artists that distribute and promote differently will stand out Brand image needs to appeal to the potential fans Brand needs to be built through style and desire No findings People may change favorite artist quickly: what to do and where to go? While markets are fragmented, through partnerships it is possible to position the brand better

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Target Prospects and Fans

 Everyone has their one taste  Every mainstream artist needs to be pushed first down to the consumers throat  An indie artist, it does not go anywhere  It is really difficult for artists to hold on their fans for longer period of time  The consumers of music are active and they make constantly active choices. So, maybe they get fooled once, but they don‟t get fooled twice  Nowadays, big artists release an album and nobody buy it. Why? People don‟t care  The system still works that a new artist put his or her great product and let the fans find it by their selves. Fans pull information and they want to get the information

Market Demand

 While there is room for new music, markets are naturally directing some bands out  There is no one that would not like music, because music is always around us  Some artists are everywhere because their labels are pushing his or her, but still these fans see something that no label can create  Every year in the mainstream has enough demand for maybe 10 acts to break through internationally every year  In the 80‟s, every year there was demand for 5-6 new bands joining the ring of stadium bands, Today that amount has getting less and less. That is in fact the level when everyone starts making money  Markets have also enough demand to sustain those small indie bands to keep their integrity and to grow their fan base continuously and also to make money  There are new ways how to break into the market. However, it is very difficult in these days to spot something that is really blue

Creating New Market space

W H E N W A Y

Competitive Advantage Market-Entry Timing Early or Late Starter Pricing

 New artists that really has connection with their fan base are doing better  It really happens very seldom that a good band does not get a recognition  No mention during interview

Distribution

 Play live as much as you can. Play, play, and play. That‟s it.  The strategy about making somebody big could be put out like this: there are certain strategies that you can use… I call them mechanisms. Money, TV, Radio, Online. So, you have to have the strategy, but at the same time you have to be ready constantly massage it, mold it, and create it  The people in those American Idol and other competitions have the same media focus, same media time, television time, writing time…  There is no MTV, not the same amount of radio channels, radio is still important  Old Structure still exists: Old executives say: “No, let’s do radio, let’s do posters, let’s do traditional media, and little bit online. We can put 10% to online.”  Online promotion should increase  Promotion process: 1) A new artist needs to have those three songs that he or she is serving to the mainstream radios. 2) A new artist needs to get the right press interested in me and write about me. 3) A new artist needs to have certain amount of clicks in YouTube. 4) A new artist needs to play in all big festivals, get profiled. 5) A new artist needs to create that buzz and push money into all these little aspects. There are lots of things that you can buy with money on that level.  Cleverness: in these days, you need to come up with ten times more ideas than before  But, there are still these guys in the industry, who control and won‟t let go  Labels obviously can take in cool band, rip it apart, brand them wrongly, select wrong songs, and drive them against a wall. It has happened to countless bands

Promotion

W Win I Loss N

Consumers change their most favorite band quite easily, therefore, a new artist needs to push the brand towards people and let them really find you There exists oversupply in the music markets; however, there is demand for new artists

It is possible to create and search for blue oceans Fans are the key No findings

 No mention during interview

No findings

 Touring side is growing because of the loss of revenues from CD sales and all the other kind of income streams that artists have. For instance, you can see a show almost every night of the week, whether you are in Finland or Germany or USA  HIM –example: Go to HIM’s websites and see their merchandizing. The band is making money through selling contact-lenses with the logo of the band’s symbol

Pricing needs to be done through gigs and merchandizing because they are the main income sources of an artist Touring, TV, radio, and online are good distribution channels Good promotion tools are radio, press, Online, gigs, and overall creating the buzz

Table 11. Comments of Jon Lieberberg and achieved findings.

Cleverness Change resistance and incorrect branding

82

5.2.3 Music export company For this study was interviewed one music export company representative, Paulina Ahokas from Music Export Finland, MUSEX. Ms. Ahokas is the CEO of MUSEX. She has extensive experience within the field of music industry for many years. She has also extensive work experience abroad. She has worked before as a club promoter in Czech Republic and as a Manager of the Finnish institute in London. She has also band background. Interview with her took for 35 minutes at MUSEX‟s head office in Helsinki, Finland. Abbreviated comments of Ms. Ahokas are illustrated next in table 12.

FEATURE W Artist Idea H Y Company Behind an Artist

Company Strategy

Goal Setting

ABBREVIATED COMMENT

FINDING

 Artist‟s main goal is to make fans  Artists need to be interested to know how to make fans  If the artist is not willing to do the job and get the fans no one will do it for him or her  Artist main job is to make sure that the product is amazing; other things are aided by professionals from different fields within the industry  It is important understand that this business, which is based on partnerships  Within every country an artist needs to have the best people doing the work for the artist by means for achieving success  Music industry professionals and record labels knowhow is based on how to do marketing and how to reach prospects and potential fans. Usually, this is not a key knowledge are of artists.  There is this certain level of success that is possible for an artist to reach without background groups and partnerships  An artist needs to have people around him or her that are committed, passionate, reliable and knowledgeable  This business is not B-to-C business; this business is more like partner-to-partner business, or even person-to-person  Closely related to company strategy are also artist‟s income streams. These streams are: your recordings, publishing, your merchandize, LIVE, and different partnerships and sponsor contracts  Record labels handle physical and digital releases and also deal with the artists  Publishing company handle publishing rights and deal with the songwriter/producer  Merchandize is taken care of by the company and artist makes a deal with about this  LIVE is handled by agent or other  Partnerships/brand co-operations are handled by manager  The whole career, success and ability to do cooperation with different partners is based on setting defined, time bound and smart goals  Further it is important to articulate with the goals and monitor how those goals have been achieved or not achieved

Artist‟s main idea is to make music for people and make fans Record labels know how to commercialize an artist to markets and also how to do marketing

International or domestic markets

 Nowadays, an artist can choose to try straight abroad or through domestic markets  The region where to go is depended more on the realistic potential and ability to find good partnerships  Demand is also one important factor because a new artist needs to have clear vision and analysis where his or her music is possible to play and perform

Music Industry Environment

 Music industry has been confronting big changes within last ten years; this abatis has affected the recording music sector the most, but as this is the sector that has traditionally invested the most in new product development, if affects the entire industry  New ways of making business is in under constant search  Artist is a brand that needs to be always positioned and which should have also its own strategy, target markets, and target prospects and its productization needs to be worked on carefully and wholesomely

W An Artist is a H Product

Music industry is based on partnerships and through partnerships is possible to gain best overall strategy

Artists success relies on how well goals have been set and achieved Possibility to go abroad depends on partnerships, artist‟s own music genre, and where demand either exists or can be generated Music industry is going through an extensive change

An artist is a brand

83

A T

W H E R E

Differentiation

 People need to realize that some things need to be really personalized.  The basis for differentiation is that an artist needs to realize what he or she is

Positioning

 Same as in any product branding

Brand and key characteristics of an artist

 An artist just needs to be so excellent that he or she is able to assure all the potential partners  1) You need to love what you do/have love for the game, i.e. making music and fans, 2) You need to be diligent/hard-working, and 3) You need to have the “eye-forthe-game” i.e. talent, but that is only the tip of the iceberg; loving what you do and hard work are even more important and talent grows with those two qualities  Also good manners are important  No mention during interview

Novelty of an Artist Market Analysis Target Market and Segmentation Target Prospects and Fans

Market Demand

W H E N W A Y

Creating New Market space Competitive Advantage Market-Entry Timing Early or Late Starter Pricing Distribution

Promotion

W Win I N

 It is important to analyze market potential  There are various ways in which this can be measured  Music that is played currently in mainstream is both market-push and consumerpull  Target markets are there where the music is liked and respected  Target prospects are those who primarily like the artist  Artists and record labels should never underestimate consumers, because they will choose in the end what they want to listen to  Nowadays artists need to gain fans first, after that the record labels will probably sign him or her. Back in the days, in the 70‟s, record labels were able to sign artist right away. Background behind this is risk taking ability  The fact is that nowadays music is consumed and listened more than ever  The amount of music has also increased  Nowadays is common that people complain that they don‟t find the new music that they would like to hear and also they don‟t know how to use all the million possible channels

Through strong personality is possible to differ from others Brand image of an artist needs to be appealing Artist brand needs to be built through partnerships, love, diligence, talent, and good manners No findings Market analysis is important Where the artist is respected the most he or she should go there Prospect and potential fans will pull the artist if they think that it is good enough

 No mention during interview

People are willing to listen to music perhaps more than ever, but sometimes they don‟t know where to look for new artists No findings

 No mention during interview

No findings

 No mention during interview

No findings

 No mention during interview

No findings

 No mention during interview  Distribution needs to be organized in a way that is easy for consumers to use. Many legal ways have been already discovered, now people need only learn how to use them  Music is possible to buy from retail stores and in the Internet  Radio has great importance at some countries and cultures but in other it does not have any value  Gatekeepers, such as professionals within record labels and media executives within radios have important role what will be distributed further and what not  Music industry has realized quickly the importance of social media as a promotion tool and, for instance, many those clever social media campaigns that seem to be the artist‟s own discovered are many times planned by marketing professionals.  There are also a plenty of examples of artist social media campaigns gone wrong: you really need to know how to market in social media and you need to study this  Artists need to know what the primary media are and how for instance social media works  Many advertising offices have said that they could easily develop a campaign for an artist, but not a single artist has reached the level of success through their campaigns. The reason is that there is different psychology within artist promotions; this is the key knowledge area of those working in music industry  Of course, does the music communicate and will people eventually like the music determines the success  Love, diligence and talent

No findings Retail stores, Internet, and radio are good distribution channels for new artists Good marketing communication tools are social media and digital and traditional media; knowing specifically about music fan behavior is key

The music itself, love, diligence, and talent or eyefor-the-game

84

Loss

 There have been so many projects that have failed, while all the effort, resources, and money have been put in the project, but still, absolutely nothing happens  Those who do not like the industry enough will always be eliminated first out from the system. That is the way it should go

While all the possible resources would have been used to promote an artist, it still sometimes is not enough

Table 12. Comments of Paulina Ahokas and achieved findings.

5.2.4 Music producer For this study was interviewed one music producer, Jimmy Westerlund. He is well known Finnish Music Producer who has been working within the industry for relatively long period of time. Currently he is making his career at Los Angeles as a Music and Media Producer. He has worked together with many famous Finnish artists such as Negative and Sturm und Drang. He also composed the song for FIFA‟s Mascot of Soccer World Championships in the summer 2010. He has also personal music and band background. Interview with him took for one hour at Aroma Bakery/Los Angeles, USA. Abbreviated comments of Mr. Westerlund are illustrated next in table 13.

W H Y

FEATURE

ABBREVIATED COMMENT

FINDING

Artist Idea

 New artists don‟t have their own identities, because they don‟t know what they want to be. They see something from TV and they start to copy it  Nowadays, the artist‟s music is often not what the band really is  In USA, the people are more determined what they want to achieve through music when compared to Finland. They usually have also an idea how they want the music sound like etc.  You need to create and develop your own machinery to get things rolling  This new era of music-making has brought up opportunities for people to make music, however, I don‟t see that people should do their recordings at home

Uncertainty for creating the idea is common, therefore, determination is required Professionals and good machinery are needed behind a new artist Structures of companies have changed Baby steps towards awareness Showing the potential at the right place determines the level of internationalizati on

Company Behind an Artist

Company Strategy Goal Setting

International or domestic markets

Music Industry Environment

 Indie label is nowadays like a major label  There is no system nowadays like it used to  In a way, there is organized activities, but not like before  I liked the old system when there was released the whole album and people bought it from the retail stores  Nowadays, a new artist should proceed one release at a time  It is really hard to get into the mainstream  You need to find your own path  Markets in the USA are totally different when compared to Finland. After few years, I still don‟t get how things are done here. What is good in Europe, doesn‟t work here. It is just the own sound and religion here  It goes other way around too, for instance, MUSE and the Killers came from UK to Los Angeles first, because almost nobody didn‟t care about them in their home country. They succeeded first here, then they were launched more broadly  There is only three big major labels left because EMI is struggling  Records do not sell like they used to.  Around the millennium everything changed quite dramatically and actually when compared to that time, back then it was easier to get budgets for making an album. I think that is one of the biggest reasons why nowadays people are doing their music at home  Record labels were not proactive enough, when the change occurred. Therefore, it is hard to say where this industry is going. Honestly, I don‟t know will this go forward or backwards

Because times have changed there is demand for new ways how to run the business

85

W An Artist is a H Product A T Differentiation Positioning Brand and key characteristics of an artist

Novelty of an Artist Market Analysis

W H E Target Market R and E Segmentation

W H E N

W A Y

W I N

 Rihanna –example: I don’t know how authentic, for instance, Rihanna’s music is, but she is a manufactured product  Nowadays, people don‟t respect enough the music itself. They focus on more how sexy an artist is, what kinds of lips, shoes, or whatever else than music he or she has or possess. People want to be just like them externally and, therefore, how he or she sings is maybe the fourth in the list of importance  No mention during interview  No mention during interview  An artist need to have the personality for this industry  The name of the game is all or nothing  Many times behind the brand is how the labels want to identify the new artist  American Idol and other similar shows produce products that are “required” at the moment. I could argue that 90% what the artist looks like is decided by others. It is all about entertainment then  I believe that the music a new artist makes and the features that an artist possess needs to come straight from his or her heart  No mention during interview

Especially mainstream artists are manufactured like products

 It is impossible to go in the streets and ask – what kind of music you like.

New artist needs to trust on his or her instincts Segmentation is vital for achieving awareness A new artist needs to push the brand towards people and let them really find you Demand is hard to predict

 Big record labels decide together with new artist what could be the potential market and then they push it out towards the chosen market.  If there is no pull by people, the artist will not survive within the chosen market

Target Prospects and Fans

 The fact is that a new artist needs to find his or her own fans. You need to do it constantly and let the project grow that people can grab on to you  The originality of an artist disappears, when there are no longer these twelve songs. Actually, it is quite hard to be a fan, if you don‟t have anything where to grab on

Market Demand

 Nowadays, songs may last about two and a half minutes. Then you produce twelve songs and release a record. It is still like before. However, the difference is that people don‟t know any other songs from that album than the hit  What people want is like a wave that changes. It is hard to describe the future: what used to be popular yesterday, is out-of-date tomorrow  No mention during interview

Creating New Market space Competitive Advantage Market-Entry Timing

Early or Late Starter Pricing

Distribution Promotion Win

Loss

No findings No Findings Brand needs to be built through personality, desire, and authenticity

No findings

No finding

 No mention during interview

No findings

 A new artist needs to have a right timing that he or she is able to perform within next summer‟s big festivals.  Another viewpoint is that you need to follow the sound that is popular at the moment. However, even the sound changes after every month, so it brings its own challenge  No mention during interview

Follow the sound and launch the releases at the right time when it has demand No findings

 If compared to 80‟s and 90‟s, nowadays, money and earnings need to be generated from other sources. You don‟t make your living through selling records  If a new artist breaks through in the USA, it is possible to make money through recordings. The reason for this is that the volumes are here bigger. Scandinavian bands or artists, they are not able to make money through recordings. It is just pocket money  The new system that exists today is not actually that bad, but what is hard within it, is to make money. For instance, it is very hard for the artist that actually makes the music to make money within this new system. That is sad and it should not go like this  No mention during interview  No mention during interview  An artist need to have his or her own unique style and own thing, but still the artist needs to be able to learn and adapt also new styles  A new artist that won‟t give up and is not willing to give up  You need to possess professionalism and challenge yourself everyday  Love for the music  The whole industry is resisting the change  If an artist is not willing to learn anything new about the music or itself, it is not going to survive for long  If there has been done low investments  Too big ego

Through recordings it is impossible to make money

Table 13. Comments of Jimmy Westerlund and achieved findings.

No findings No findings Style, personality, control, professionalism, and love Low investments, ego, change resistance and willingness to learn

86

5.2.5 Concert and festival manager For this study was interviewed Juhani Merimaa who is the CEO in one of the most successful venues, Tavastia, in Finland. He has been also involved in arranging few large summer festivals in Finland, including Ruisrock and Ankkarock. He is active businessman within the field of music industry and one of the most influential, honored, and respected person of Finnish rock music. Interview with him took for one hour at his office in Helsinki, Finland. Abbreviated comments of Mr. Merimaa are illustrated next in table 14.

FEATURE W Artist Idea H Y

Company Behind an Artist

Company Strategy

Goal Setting

International or domestic markets

ABBREVIATED COMMENT

FINDING

 It is a creative process when a new artist is developed  Many bands first play cover music and through this process they are able to find their own sound and style  Performing and feedback guides all the early activities  When the first feedback is acquired then the idea can develop further

Artist idea is a creative process which develops further interactively together with early fans If an artist wants to be successful widely, he or she needs to have a big machinery and a good manager

 In Finland, we are lacking this manager institution  Managers‟ job should be to race record labels, take care of all the interview arrangements, to make sure that the artist gets the most important concerts and shows...  If an artist want to reach international success, he or she needs to be able attain all the social media and traditional media. Therefore, you need to have big machinery around you  Nowadays many artists start to do all the activities and making music by their selves and distribute the music in the Internet and so on. That is the way how to make fans and maybe later on the artist will sign a contract with record label  There is this certain level that you can reach without the help of record labels and others  Major labels have lately bought smaller indie labels or their key people under their wings  New trend within the music industry is that labels have also start taking responsibility of artists‟ touring side  Promotion companies like Live Nation on the other hand have also strengthened their positions. Their essential strategy is nowadays to take over the control of clubs and festivals around the world  Nowadays music industry tries to shorten the path of new artists towards success. For instance, when Lady Gaga was discovered, it didn‟t take too much time before she was a huge stadium phenomenon worldwide  Artists can decide how they want to release music, after short periods or longer  International record labels always want to see how a mainstream artist has succeeded in his or her domestic markets, after that it is possible to take the artist further, it is presumable because the competition within mainstream markets is tough  There are many Finnish artists from different low culture genres that has succeeded better abroad than in Finland  Low culture artists proceed differently than mainstream artists  Sometimes creating the hype within certain low culture genres can be the key towards success. Actually, quite many big names from Finland like HIM and Nightwish have been first successful in low culture genre

Company strategies are changing especially now when the whole industry is changing Nowadays success is tried to reach faster than before A new mainstream artist needs to be first successful within domestic markets Low culture artists are able to launch music straight away abroad

87

Music Industry Environment

W H A T

An Artist is a Product Differentiation Positioning Brand and key characteristics of an artist

Novelty of an Artist Market Analysis

W H E R Target Market E and Segmentation Target Prospects and Fans Market Demand

Creating New Market space

W H E N

W A Y

 Music industry is facing structural change at the moment and it is hard to say where the industry is going at the moment  This change has also at the same time increased the interest about music and its consuming  Old CD format is dying and that has weakened the position of record labels  Touring and LIVE has on the other hand increased quite a lot  Record labels wish that they could still pull all the strings like they have used to, but that is not possible anymore  In the beginning of the century, record labels wasted their resources and they close different illegal channels in the Internet, while they should have start to develop them even further towards interesting places where to buy music  How record labels will solve these dilemmas will determine their future success  It is obvious that technological development is impossible to stop. Now it is time for new solutions and to rearrange few traditional activities  Artist is a product  It is hard to convince gatekeepers because they have seen millions of similar artists already  No mention during interview  The music itself is essential  Physical presence and communication with potential fans is vital  Personality, you either have it or not  Story needs to be appealing  No mention during interview  It is hard to accomplish market analysis beforehand, because after releasing you see how the music appeals etc. And if something works with another artist, it may be that it is useless with another one  You cannot force something to happen, if consumers don‟t pull the artist, then they will not want to listen to him or her  Through low culture is possible to grow towards mainstream  An artist needs to first reach his or her own potential fans  When entering LIVE, you need to have certain amount of fans already  Usually, all the new good things will grow from low cultures  There is always certain demand in mainstream markets  Nowadays, people has becoming more and more mass consumers of music  First an artist needs to be pushed a little. After that, the consumers decide whether to pull or not the artist further  Music makers should start from assumption that is better to create something new than copy what others have already done  ”What is behind the corner” –thinking

Competitive Advantage

 Artists compete for the same space, therefore you need to fight to gain your own living space

Market-Entry Timing

 You need to be at the right place at the right time  In general, it is better for new artist to launch their music during spring time, if they want to attend or even have a chance to attend to festivals during next summer

Early or Late Starter Pricing

 No mention during interview

Distribution

 The most important revenues for artists come from LIVE and touring. However, record labels have started to weaken LIVE contracts with artists, to reach profitability  While services like Spotify is good for consumers (millions tracks of music) and record labels (advertisement and profits through shares), it is not good for artist because they do not get the profits that they would deserve. This has also forced artist to do more LIVE  Services like Spotify is good way to reach potential fans  Traditional gatekeepers decide what is distributed widely

Music industry is facing large structural changes and how the industry will overcome the negative impacts will determine the future success of the whole industry

An artist is a product Gatekeepers role is undeniable No findings Artist brand needs to be built through the music itself, charisma, personality, and story No findings Market analysis is hard to accomplish beforehand Prospects and potential fans create demand Potential fans are the target prospects Consumers are smart and they eventually notice what is good and what is not In the long run, artists should explore more for blue oceans A new artist needs to fight for his or her space An artist needs to be ready to enter the markets at the right time No findings Free music distribution has forced artists to concentrate more on touring Spotify is good distribution channel for new artists

88

Promotion

W I N

Win

Loss

 Internet and social media is important because it allows fans to approach an artist more directly and widely. For instance, through Facebook it is possible to connect and network first with friends and after that with your friends‟ friends and so on. This has actually decreased a bit the importance of gatekeepers  Internet is also good and easy because nowadays you don‟t need to send that many times those demo tapes that are rarely listened  Digital and traditional media explore and follow constantly social media  Word-of-mouth an artist can easily do it by him or herself. Street teams are good for word-of-mouth marketing  Without gatekeepers and record labels, it is impossible to break through  Success may evolve by coincidence, but of course you need to be talented  An artist needs to be well connected within his or her own scene  Natural personality is the key for greater success  There are always the same artists in the lists of the most hated and most loved  Artist can screw his or her own path many different ways, therefore, if we put twenty artists on the row, not all of them will be successful  If the artist will not pull the artist, then it is impossible to be successful. Artist‟s characteristics and the music needs to be appealing

Good marketing communication tools are Emarketing, social media, word-ofmouth marketing, and both digital and traditional media Gatekeepers, talent, luck, partnerships, and personality Because of the oversupply, all the artists are not able to breakthrough

Table 14. Comments of Juhani Merimaa and achieved findings.

5.2.6 Media representatives For this study were interviewed three music industry professionals from the field of media. Interviewed media representatives were Juhani Kansi from YLE popular music, Marianne Kiskola, former radio journalist in YLE and current media image professional, and Heta Hyttinen, freelance music journalist. Mr. Kansi has worked for YLE, Finland's national public service broadcasting company, for almost thirty years. Currently, he is the chief of YLE‟s popular music department. He has worked within the field of music business quite extensively. His experience within the industry covers the position of nightclub DJ, record label employee, producer of different programs in YLE, etc. He has also personal music and band background. Interview with him took for one hour at YLE‟s headquarters in Helsinki, Finland. Abbreviated comments of Mr. Kansi are illustrated next in table 15.

FEATURE

ABBREVIATED COMMENT

FINDING

Artist Idea

 Back in the days, artists considered bigger pictures and they wanted to express feelings like pain, happiness or sadness. Also artists wanted to be connected to some culture and really express bigger issues. Now times have changed  Nowadays artists could do everything on their own, but only few artists can manage all the activities related to this business  I believe that any artist really does not have enough time to take care of all those activities related to the business  If artist would do anything, then record labels would not be needed anymore  Where record labels are especially needed is now and also in the future is that they know the A&R (artist and repertoire) work and marketing  Artists also need record labels to reach the next level

The purpose of making music has changed Record labels are important for artists because they know how to accomplish the A&R work, marketing activities and they have all the partnerships

W H Y Company

Behind an Artist

89

Company Strategy

 Back in the days, record labels had more opportunities to take risks, because they made the required income through these bigger names like U2  Nowadays the business has changed the pace and people are doing, recording, and publishing music from their home computers  In the future there will be less and less these big phenomena like U2 etc.

Goal Setting

 Artists are forced to publish single releases  Through single releases it is relatively hard to make extensive careers and in that kind of business people only search for hits  For some reasons, big record labels do think that it is good first to be successful within domestic markets, because at the whole organization level people from the management will always ask; how the artists have succeeded in the home territory?  Perhaps it is good way because within domestic market an artist is able to practice and it might be also better from that viewpoint that it is possible to notice if you really are ready for this industry  For instance, USA is very difficult market. You need to basically go there and live in that country. If you want to breakthrough there, it may take years  The industry is shattered  It is harder and harder for artists similar and as big as U2 to breakthrough, because consumers and their expectations have changed.  Will there be any big arena shows and is there enough demand for those in the future? That is one big question  When mp3 format appeared, record labels were late from that change. Now record labels are paying that bill that occurred from the change  Consumers are used to get music for free. I don‟t know how easy it is to make the music again to be chargeable  Services like Spotify are wonderful from the point of view of consumers. But, what an artist does get from that service, peanuts? Spotify is owned by big record labels and they get income through advertisements etc.  Music industry is not doing well  Even Elvis was a product back in the days  Everything is productized nowadays. Even if you claim that you are not a product, even that mentality is possible to turn as a brand  It is hard to see that artists nowadays wouldn‟t be discussed as products  Oversupply forces artists to be different from each other

International or domestic markets

Music Industry Environment

W An Artist is a H Product A T Differentiation

Positioning

Brand and key characteristics of an artist

W H E R E

Novelty of an Artist Market Analysis

 It is important to build your own position within the markets because nowadays many artists are not even recognized by their name  It might have been Music TV (MTV) or similar who had this research, there it was stated that today‟s generation does not know who the artist that is playing the song is and they don‟t even care about it. It is all about the one song and the artist and his or her history are secondary matters. One reason for this might be that there does not exists any interesting story behind the artist, but music is relatively good  An artist needs to be talented and he or she has to have his/her own style  An artist needs to have background story, which appeals to potential fans  Desire is one crucial feature – what the artist really wants to achieve?  Every little aspect needs to be considered and taken under consideration when building the one completed package  No mention during interview  Commercial radio stations accomplish extensive research. They will not play music that does not reach mainstream consumers  During competitions like Idols, it is relatively easy to accomplish research what people want

Target Market and Segmentation

 It is vital for a new artist to find his or her target market and prospects  Luck has also its own role with choosing the right target market

Target Prospects and Fans

 It is important for an artist to understand what people really think about you  Stories and desires are important also for fans  According to a study of MTV (music television), people do not care anymore. It is hard to reach prospects and fans already nowadays when music is only consumed and when an individual gets bored he or she will replace a song with another one  There are still these fans that really want to connect with an artist. To get people involved with the artist project is possible to have more committed fans. Fans are able to take part for instance making the artist‟s music video through sending video footage that they have filmed during shows with their phone cameras etc.

Record labels‟ risk taking ability has decreased, therefore, people are making music more at home Goals are set by one release at a time A new mainstream artist needs to be first successful within domestic markets

The industry was late when the change occurred Now the industry is more and more shattered and not doing well

An artist is a product

Differentiation is important because of oversupply A new artist needs to be able to build an image about him or herself to prospects‟ minds Artist brand needs to be built through talent, story, and desire No findings Mainstream radio channels and reality shows like Idols accomplish extensive research Decision of target market is required also a bit of luck Image, story, and desire are important both for an artist and also for his or her fans

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Market Demand Creating New Market space Competitive Advantage

W H E N Market-Entry Timing

W A Y

Early or Late Starter Pricing

Distribution

Promotion

W Win I N

Loss

 Because of the oversupply within music markets, it is good that there exist these gatekeepers that will reduce the amount of commercialized music  No mention during interview

Oversupply

 There are many artists that are as good as some others, but they don‟t ever get a chance, therefore, music industry is sometimes unfair  If you are not able to use your chance, there are lots of other options in other countries too  Springtime is important for new artists  Through releasing music in spring, it is easier to get to play in summer festivals  When entering international markets, I‟m sure that the timing is calculated very precisely  No mention during interview

Luck is needed sometimes to be able to breakthrough Market-entry time needs to be affiliated to springtime No findings

 People are ready to buy concert tickets for 200 euros, but they are not ready to buy records for 10 euros. That is the way how it goes at the moment  I don‟t know if the business is affordable for artists nowadays  The markets are consumers and everything needs to be able to get for free  You cannot put a price tag for an artist anymore in these days  On the other hand there is lots of money in the markets, but the consumers are not buying directly to record labels and artists  There will be no new music shortly, because nobody is willing to pay for it and artists refuse to make it for free  TV is no longer interested about music or new music. TV is usually exploited after the certain success has been achieved  Radio has great importance

Consumers want everything for free; however, they are willing to pay high price concert tickets. You cannot put a price for an artist in these days Radio is good distribution channel for new artists Good marketing communication tools are social media, word-ofmarketing, partnerships and sponsor contracts The music itself, control, desire, professionalism, work morality, and luck

 Social media is nowadays important. The friend‟s suggestion has stronger impact that advertisement on the magazine or TV  Traditional advertising is at some level quite useless when launching a new artist  What is needed first is this word-of-mouth marketing and create this small hype  Also partnerships and sponsor contracts are important. It is vital to find sponsors that do not have negative impact on artist‟s image  You never know what is going to be the next hit and that is the surprise factor within this industry  Control is very important nowadays right from the start. An artist really needs to know what he or she wants to achieve  Professionalism is also seen today as key factor. Successful artists need to have strong work morality  You need to be able to get the right people interested about you and also get the right partnerships, therefore, luck is required too  No mention during interview

No findings

No findings

Table 15. Comments of Juhani Kansi and achieved findings.

Another media representative who was interviewed was Marianne Kiskola. She is not currently working directly within music business. She has worked within the industry as a radio journalist in YLE popular music in the early 1990‟s. In addition, she has relatively large network of acquaintances within the music industry. Recently, she has published 8 cookbooks. She is also the founder of the trademark, FairMary. At the same time, she coordinates the media images of few publicity personnel in Finland. Interview with her took for almost two hours at Wayne‟s Coffee Kaisaniemi in Helsinki, Finland. Abbreviated comments of Ms. Kiskola are illustrated next in table 16.

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FACTOR W Artist Idea H Y

Company Behind an Artist

Company Strategy

Goal Setting

International or domestic markets

Music Industry Environment

W An Artist is a H Product Differentiation A T Positioning Brand and key characteristics of an artist

Novelty of an Artist

W H E R E

Market Analysis Target Market and Segmentation

ABBREVIATED COMMENT

FINDING

 For instance, in the 80‟s new band and artists were more authentic and the bands were not created, they just appeared. During that time they also did their own songs quite often, at least more often than nowadays  Nowadays, the process goes like this: There is this person A, who wrote a song to a person B, who composes the song to person C, who further produces the song to a person D. During this process the story behind the song is already lost  New artists are nowadays more often one hit wonders than appealing rock stars, who create their own careers together with record labels  It is highly rare that an artist has his or her own sound  The background group of an artist has a significant importance. An artist needs to have a safe net around him or her, who knows how to say no  In the 80‟s the most important person for a new artist was the manager, who signed the contracts and was the CEO for the artist company. Some bands had bad luck because some of the managers just took the money and left, but there were these good managers too  Nowadays there is not that many managers, especially in Finland, because it is all about the machinery who wants to control every activity  Record labels do not sign a new artist, if they already has similar artist in their label. While an artist could be the most talented individual in his or her genre, he or she could easily be left out, because the spot is already reserved

Even the idea of an artist has changed to be manufactured idea

 Before within every industry, people used to think that it is important to get this profitable after one year or after even ten years. Nowadays, this mentality does not exist anymore  New artists are release one album, sometimes even one song at a time  There is no room for an artist to grow  You need to take 10 baby steps to achieve one bigger step, therefore, for a new artist, it is important to create the process by means that the process is not relying on only one card  Finland is very hard market If an artist wants to go abroad, he or she needs to think right away the international markets to be able to gain success  Nowadays, there are only few Finnish artists that are good enough to be really interesting also abroad  The change within the music industry has been enormous  Record labels only want to sign “instant win” -artists  Through instant win –thinking, it is not possible to have sustainable music culture after ten years  You need to accept the fact that you will be a product, if you want to be a successful artist .  To be different, an artist needs to make music that is out of box of instant win – thinking.  No one should be able to copy or imitate the new artist  Nowadays every artist looks alike and sounds alike  No mention during interview  An artist needs to be mature and experienced enough, because otherwise he or she is too easy to be led to a wrong path  An artist needs to know what he or she is willing to achieve  While an artist is productized, he or she needs to have the experience of a fortyyear-old, a body like twenty-year-old, voice like Janis Joplin‟s, or other crazy factor behind you  An artist should also have a story or a secret. I would prefer to use word secret, because it is good that you have something that you keep inside of you  Usually artists that have reached international success have had long road before reaching that certain level within international markets

The background group of an artist is vital to build as functional as possible

Record labels have their own classifications and based on those, they sign new artists Artists profitability is the key for goal setting and without profitability there is no room for an artist to grow

Artists need to think big already in the beginning of the career if they desire to go abroad Music industry and record labels are relying only on instant win -artists An artist is a product Music made by own rules has bigger chances to be successful No findings Brand needs to be built through maturity, experience, desire, story, and secret

 No mention during interview

Usually international success does not come right away No findings

 Sometimes the fact is that music and songs are pushed to markets and the people are forced to listen to what plays on the radio  Markets are limited; it is very strict where you can be played and where not  For instance, in Idols (or American Idol) the management group will decide what kind of an artist is needed next and in which markets

Markets are limited and new music is pushed and sometimes even forced to markets

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Target Prospects and Fans Market Demand

W H E N

Creating New Market Space Competitive Advantage

Market-Entry Timing

W A Y

Early or Late Starter Pricing Distribution

Promotion

W Win I N

Loss

 It is unfair for artists that sometimes you don‟t have anything to say about your target prospects. Your target groups are narrowed down; sometimes artists are forced to play music to people that they normally wouldn‟t play.  Your target group is decided and your music is categorized very strictly  In the future I think the demand will go back to the authenticity and basic rock, because at the moment there is just too much of junk in the markets  Nowadays, the majority of people do not expect albums to be released, they want singles and music that is possible to consume. It is a wonder how quick people forget the one single song, they just erase the song from mp3 player and replace it with another one  No mention during interview

Target groups and potential fans are decided beforehand

 In the 70‟s and 80‟s to gain competitive advantage, an artist needed to be good and talented, nowadays, how good or talented you are is decided through money and partnerships  If I would build an artist product, I would not start comparing the artist to another similar; I would make it so unique that no one can copy the artist  The last phase of launch may take time  An artist needs to be ready when his or her kind of music is wanted  Also an artist needs to have good song, lyrics and sound, and able to follow the trend of presence time  It is easier to enter the markets if the music is timeless  No mention during interview

What is more important: money and partnerships or uniqueness?

 No mention during interview  Radio and TV  TV is absolutely the most expensive and also dangerous. When you are performing in TV, people really needs to know you

No findings Radio and TV are the main distribution channels for artists Good marketing communication tools are radio, magazines, publicity, word-ofmouth marketing, TV, networking, and Internet and social media

 The basis of promotion of an artist is that the artist needs to be able to describe the product with only one sentence. The artist needs to be interesting, able to sell her or himself, and in a way that fans remember the artist easily also next time  Promotion process: 1) you need to release the song and get the people excited about you. 2) You need to participate in certain amount of charity and other shows and also give specific interviews. 3) Then the song or album will be played over and over in the radio; only within those channels where the partnerships exist. 4) Then TV.  Word-of-mouth marketing is important. It is crucial but at the same time slow way to promote  An artist needs to know certain people; therefore, networking is important also  All the used media and the information in these different forms should be done in a way that the stories are not advertisements, they need to be more like informative articles (different magazines are important)  The most important promotion tool is definitely radio  Publicity is also important and especially good publicity  Internet is also nowadays one of the most crucial. Facebook and other similar need to be able to utilize and usually you should have somebody to do it for you  Nowadays, to be successful, it is important to understand how the business works and how the right publicity will be achieved  In the 80‟s it was the pure talent  In the 90‟s you need to inventive and clever  Nowadays, you don‟t need to be talented. You need to be good looking, right size, right age, and shocking. The artist is like a package that does not need to know how to sing  You need to have excellent charisma in the stage  You need to know what you represent, have good attitude and be flexible  If you take yourself too critically both in nature and in the stage

Nowadays the demand is based on single releases

No findings

Market entry and commercialization phase may take time No findings

Nowadays, you don‟t even need to be that talented singer because external features have more importance. Charisma and attitude are vital If an artist is narrow-minded

Table 16. Comments of Marianne Kiskola and achieved findings.

Third media representative who was interviewed was Heta Hyttinen. She is a wellknown music journalist in Finland. She has started as a journalist already in 1987 in children‟s program in YLE. Currently, she is the Editor in Chief of Finnish Music Magazine ‟Rytmi‟. She has also worked as TV reporter and host in different popular

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music TV programs such as Jyrki (MTV3, Finland) and Musiikki-TV (YLE, Finland). Additionally, she is also working at the moment in the program called Idols (Finnish version of American Idol). Interview with her took for one hour at Pop Media‟s office in Helsinki, Finland. Abbreviated comments of Ms. Hyttinen are illustrated next in table 17.

FACTOR W Artist Idea H Y Company Behind an Artist

Company Strategy

Goal Setting International or domestic markets

Music Industry Environment

W An Artist is a H Product A T

W H E R

ABBREVIATED COMMENT

FINDING

 New uprising artists are very conscious nowadays. Right after the establishment of the band, an artist starts to plan everything else that is not related to the music itself  It is more than suitable that once in a while the artist would focus on where he or she is at best, making music.  Everyone doesn‟t need to do everything. Those who know how and wants to do it, why not. However, the basis for an artist branding is that it should not be skewed  Record labels do not sign new artists like they used to, because the risk taking ability has decreased nowadays  Record labels trust their own intuition when signing new artists  Sometimes I have offered a new artist for a label and they have not taken it. However, later the same artist has risen from else where  Poets of the Fall –example: “The Finnish band called Poets of the Fall has its own recording company and they manage all the activities by their selves. That suite for them. Their songs have been played widely around the globe – that is their thing.”  It is even strange that record labels should be nowadays these multitalented companies who will take care of management, recordings, touring, merchandize factory, etc. Therefore, I don‟t wonder why people are little overwhelmed what to do next. That is big challenge.  Old fashion record labels are taking over the control of touring and live -business  On the other hand, Live Nation, which is one of the world‟s biggest promotion companies have started to smuggle its tentacles to traditional recording industry  No mention during the interview  You can go straight to international markets or start from domestic markets  Some parts of the world, some music genres are much more powerful. If you really want to play and perform then you need to leave the country and take direction there where your music is the most wanted

New artists are conscious but it is good to remember that making-music is the basis New artists are not signed to labels as much as they used to, therefore, individual labels are also created by artists Structures of companies have changed

 Last few years the whole music industry has been confused about what‟s going to happen now and next. There has been more desire than know-how to react for these changes  Those who were smart enough and realized the change in the beginning of the century (e.g. iTunes), they are obviously the winners of today  Artist is not a product, because I want to believe that the ultimate task for an artist is to compose and create music  Artist might evolve to be a product but only if he or she wants so

Differentiation

 Through personality or character  Ville Valo from HIM is good example of being wonderful character. He is almost like Jack from movie ”Night Before Christmas”

Positioning Brand and key characteristics of an artist

 No mention during interview  To build an artist brand, it is not enough anymore to be talented, your personality has to be strong too  An artist can be successful also without any brand, then the music speaks for itself  Characteristics of a successful artist brand are itself the product, personality, desire, style, and story.

Novelty of an Artist Market Analysis

 No mention during interview  It is hard to imagine that record labels would do any Excel –tables  Record labels do not observe, they know how things should be done and accomplished in their mind

No Findings Internationalizati on can be accomplished straight away or through domestic markets Desire to make the change is required through willingness and new knowhow Artist is a product only if he or she is willing to be presented as a product It is important to be able to differ through personality No Findings Brand needs to be built through product, personality, desire, style, and story No findings Market knowledge is based on the intuition of record labels

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E

Target Market and Segmentation Target Prospects and Fans Market Demand

W H E N

W A Y

Creating New Market space Competitive Advantage Market-Entry Timing

Early or Late Starter Pricing

 A rock artist is quite hard to categorize  Artists needs to learn and accept their markets  A new artist should always go naturally there, where he or she has the ability to gain the most potential success  A new artist needs to understand his or her target markets  Fans determine an artist‟s success  If the product is good enough, it is impossible to avoid success  There are always certain trends during different periods of time  It is impossible to know what will be a hit, therefore, it is important that especially record labels know what kind of music has demand currently  There exists sometimes that kind of resistance that people do not want to accept new kinds of ways to do promotion etc.  Everything related to the publicity, is wanted to be affiliated at the actual commercialization  Spring time is the most crucial for new acts  Through releasing and pushing artists during spring-time, it is possible to get them to play in the summer festivals  If the new artist is very good, then it does not have that much difference is he or she commercialized in fall, winter, or spring time  If you are one hit wonder, then that one song and artist needs to be released absolutely during spring  Summer is the poorest time to launch new artist or new music  No mention during interview

Target markets are needed to learn and accept

 Nowadays, it is not that crystal clear who is allowed to touch and what  Today record labels are going to artists pockets: to artists‟ merchandize etc.  For instance, through Spotify artists do not collect that much earnings  There exist also these kinds of artists who only put their music available on iTunes

Income policy of artists and record labels are also going through change LP –era could rise once again To promote yourself, you need to be interesting not only musically but your characteristics are vital too

Distribution

 Vinyl is back, an older way to consume music is growing to be hot again

Promotion

 To get an interview to a magazine or newspaper, it is much easier, if you are divorcing, getting married, getting a child, anything else but not the music. That is sad  Nowadays it is easy to promote yourself through Facebook, MySpace, YouTube  Actually, magazines do not receive that much demos and maybe it is good thing for some artists that they don‟t get that criticism  On the other hand, it could be good thing to send demos and promote your new band through ordinary music magazine  Process: 1) To build underground hype through Facebook as a public secret. 2) Release the appetizers, first single and video. 3) Performs at some kinds of charity galas. 4) Release of the album  Humanity is one advance that typical Finnish musician obtain and that is really something that they can carry with them when they are trying to break through internationally  You can be successful without any brand, then the music just needs to be absolutely amazing.  No mention during interview

W Win I N Loss

Fans determine the new artist‟s success Trends determine demand Sticking with old habits is common Publicity is vital element Market-entry time needs to be affiliated to spring, however, good music will always find its way to fans No findings

Humanity, personality, and excellent music

No findings

Table 17. Comments of Heta Hyttinen and achieved findings.

5.3 Summarized Results Based on Findings Findings seen above in tables were created on the basis of what the interviewed stated during the interviews. Within next subchapters 5.3.1-5.3.6 are illustrated and analyzed the summarized findings and results.

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5.3.1 Why In chapter 3.1, it was proposed that people want to listen to music. Therefore, new artists should be able to answer this question why, in order to provide as good product as possible to the people. Within next table 18, it is possible to see all the findings of why as a summary. Further, each feature, findings and the empirical results are discussed after the table.

Artist Idea

Company Behind an Artist

Company Strategy

Goal Setting

Towards domestic or international markets

Music industry environment

Artists develop differently and record labels usually sign new artists during their development It is important to define desire and vision through realism

Roles what artists do and what record labels do, should be justified and clear

Goal settings and objectives of different artists vary a lot

A new mainstream artist needs to be first successful within domestic markets

The industry is doing better than 4-5 years ago and new legal models to consume music have been developed

Goals need to be set through realism and ROI

A new mainstream artist needs to be first successful within domestic markets

Changes in the industry have had impact on the music sales

Jon Lieberberg

New artist needs to work hard to reach attention

There are different ways how to organize activities

Music determines the potential to international markets

Because times have changed there is demand for new ways how to run the business

Paulina Ahokas

Artist‟s main idea is to make music for people and make fans

Record labels know how to commercialize an artist to markets and also how to do marketing

Nowadays the requirement for record labels is to be multitalented organizations that are able to commercialize new artists efficiently Nowadays the requirement for record labels is to be multitalented organizations that are able to commercialize new artists efficiently Companies such as record labels and promotion companies need to cooperate during the launch to achieve better results Music industry is based on partnerships and through partnerships is possible to gain best overall strategy

Music industry is going through an extensive change

Jimmy Westerlun d

Uncertainty for creating the idea is common, therefore, determination is required

Professionals and good machinery are needed behind a new artist

Structures of companies have changed

Baby steps towards awareness

Possibility to go abroad depends on partnerships, artist‟s own music genre, and where demand either exists or can be generated Showing the potential at the right place determines the level of internationalizatio n

WHY Jouni Perämaa

Kimmo Valtanen

Record labels, gatekeepers and so called champions are vital for new artist‟s performance

Artists success relies on how well goals have been set and achieved

Because times have changed there is demand for new ways how to run the business

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Juhani Merimaa

Artist idea is a creative process which develops further interactively together with early fans

If an artist wants to be successful widely, he or she needs to have a big machinery and good manager

The purpose of making music has changed

Marianne Kiskola

Even the idea of an artist has changed to be manufactured idea

Record labels are important for artists because they know how to accomplish the A&R work, marketing activities and they have all the partnerships The background group of an artist is vital to build as functional as possible

Heta Hyttinen

New artists are conscious but it is good to remember that makingmusic is the basis

New artists are not signed to labels as much as they used to, therefore, individual labels are also created by artists

Juhani Kansi

Company strategies are changing especially now when the whole industry is changing

Nowadays success is tried to reach faster than before

Record labels‟ risk taking ability has decreased, therefore, people are making music more at home

Goals are set by one release at a time

Record labels have their own classifications and based on those, they sign new artists

Artists profitabilit y is the key for goal setting and without profitabilit y there is no room for an artist to grow

Structures of companies have changed

A new mainstream artist needs to be first successful within domestic markets Low culture artists are able to launch music straight away abroad A new mainstream artist needs to be first successful within domestic markets

Music industry is facing large structural changes and how the industry will overcome the negative impacts will determine the future success of the whole industry The industry was late when the change occurred Now the industry is more and more shattered and not doing well

Artists need to think big already in the beginning of the career if they desire to go abroad

Music industry and record labels are relying only on instant win artists

Internationalizatio n can be accomplished straight away or through domestic markets

Desire to make the change is required through willingness and new knowhow

Table 18. Summarized findings of the question why.

Artist idea Altogether, the main idea of an artist within the music industry is to make music for the people and to reach fans. According to the findings of the interviews, new artists should take under consideration that each artist develops differently. New artists are signed within different phases of their development process and therefore, it is also important to define desire and vision through realism already in the early stages of the project. Through talent shows like American Idol and other similar, it is possible that the idea of an artist is sometimes a so-called manufactured idea. However, an artist idea is always a creative process, which develops further together with the potential fans. Therefore, a new artist needs to work hard and to reach attention.

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Company behind an artist Company behind an artist has a major role for how big the artist can eventually grow. According to the findings of the interviews, there are different ways how to organize the activities. For instance, new artists are not signed to labels as much as they used to, therefore, artists also create individual labels. Still, it is good to remember that professionals, big machinery, and good manager are needed behind a new artist, especially, within mainstream music. For instance, record labels know how to do A&R (artist and repertoire) work, how to commercialize an artist to markets and also how to accomplish all the marketing activities. Record labels are important for artists also because they have all the partnerships already created beforehand. Therefore, it is possible to argue that record labels, gatekeepers, and so-called champions are vital for a new artist‟s performance. However, one important thing is to make sure that the roles what artists do and what record labels do, should be justified and clear. Company strategy Music industry is based on partnerships and through the partnerships it is possible to gain best overall strategy. According to the findings of the interviews, nowadays the requirement for a record label is to be a multitalented organization that is able to commercialize new artists efficiently and without risks. It is also common that, nowadays, record labels and promotion companies cooperate during the launch to achieve even better results. Actually, also the company structures have changed lately. The reason behind the changes of the strategies lies under a fact that the whole industry is renewing at the moment. Further, record labels have their own classifications how many similar artists they are able to keep at the same time and based on those allotments, they sign new artists. This fact could be one of the reasons why people are making music more at home, with their own recording equipment. Goal setting The success of a new artist is relied on how well goals have been set and achieved. Goals should be based on realism and return-on-investment (ROI). According to the findings of the interviews, goal settings and objectives of different artists vary. One good way to proceed is to take baby steps towards awareness. However, nowadays success is also tried to reach faster than before and goals are set by one release at a time. The artist‟s profitability is the key for goal setting and without profitability there is no room for an artist to grow. Therefore, it is good to set the goals at least through realism.

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Towards domestic or international markets It was possible to notice that quite many music industry professionals think that new mainstream artists need to be first successful within domestic markets. Without success at home, it is almost impossible to go abroad. However, for low culture or indie artists, it is even better to launch the music straightaway abroad. Therefore, it can be argued that internationalization can be accomplished straight away or through domestic markets depending on the music genre. According to the other findings of the interviews, the music itself, partnerships, music genre, and where demand exists determines the potential to launch a new artist to international market. Further, it was also possible to recognize that if a new artist desires to go abroad, he or she needs to think big already in the beginning of the career. Also, showing the potential at the right place determines the possibility for internationalization. Music industry environment As stated many times before in this study, the music industry is going through a big structural change at the moment. It was argued few times during the interviews that the industry is more and more shattered and not doing well. This was possible to see through almost every interview. Therefore, a new artist needs to also consider this while deciding to launch his or her product or brand within the markets. According to the findings of the interviews, the industry was late when the change occurred. The changes in the industry have had impact especially on the record and release sales, and, nowadays, the industry and record labels seem to be relying quite often so-called instant win –artists. However, the music industry is doing better than 4-5 years ago and new legal models to consume music have been developed. How the industry will overcome the negative impacts will determine the future success of the whole industry. There is obviously demand for willingness and new knowhow, and also new ways how to run the business. 5.3.2 What In chapter 3.2, it was proposed that a new artist product needs to be differentiated and positioned individually. Therefore, new artists should be able to answer this question what, in order to provide as good product as possible to the people. Within next table 19, it is possible to see all the findings of what as a summary. Further, each feature, findings and the empirical results are discussed after the table.

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An artist is a product

Differentiation

Positioning

Artist brand and key characteristics of an artist

Novelty of an artist

Jouni Perämaa

An artist is a product

It is possible to accomplish through alternative sales channels and external features

An artist is needed to be able to connect in people‟s mind

Brand needs to be built through good music, charisma, story, focused desire, and authenticity

Usually artists are developed little by little and international success does not come right away

Kimmo Valtanen

An artist is a product

Jon Lieberberg

Especially, mainstream artists are manufactured like products

Paulina Ahokas

An artist is a brand

Jimmy Westerlund

Juhani Merimaa

Especially mainstream artists are manufactured like products An artist is a product

Juhani Kansi

An artist is a product

Differentiation is important because of oversupply

Marianne Kiskola

An artist is a product

Heta Hyttinen

Artist is a product only if he or she is willing to be presented as a product

Music made by own rules has bigger chances to be successful It is important to be able to differ through personality

WHAT

New artists that distribute and promote differently will stand out Through strong personality is possible to differ from others

Brand image needs to appeal to the potential fans Brand image of an artist needs to be appealing

Gatekeepers role is undeniable

A new artist needs to be able to build an image about him or herself to prospects‟ minds

Artist brand needs to be built through good music, personality, style, desire, and story Brand needs to be built through style and desire

Artist brand needs to be built through partnerships, love, diligence, talent, and good manners Brand needs to be built through personality, desire, and authenticity Artist brand needs to be built through the music itself, charisma, personality, and story Artist brand needs to be built through talent, story, and desire

Brand needs to be built through maturity, experience, desire, story, and secret Brand needs to be built through product, personality, desire, style, and story

Usually international success does not come right away

Table 19. Summarized findings of the question what.

An artist is a product According to the findings of the interviews, an artist can be seen as a product or a brand. In other words, like any other product, an artist product is also possible to be branded. Especially, mainstream artists are manufactured to markets like products. However, this topic is highly sensitive and according to one finding, an artist is a product only if he or she is willing to be presented as a product.

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Differentiation Differentiation is possible to accomplish through many ways. According to the findings of the interviews, alternative sales channels, alternative promotion strategy, external features, and personality were seen the tools of artist differentiation. Nevertheless, the importance of differentiation is undeniable. Music industry is based on partnerships and the control of gatekeepers; therefore, it is vital to stand out also for them differently than other similar artists. In addition, differentiation is important because of the oversupply within music markets. Positioning Positioning of an artist should be done like within any other industry. According to the findings of the interviews, it is crucial for a new artist that he or she is able to build an image about him or herself to prospects‟ minds and also to connect in people‟s mind. Therefore, brand image needs to appeal to the potential fans. Artist brand and key characteristics of an artist A brand is not born until consumer experience in his or her mind that a product has a certain added brand value when compared to similar products within the market. According to the findings of the interviews, key elements of building strong brand are based on the music itself, personality, talent, charisma, story, authenticity, desire, and style. It was interesting to notice that also the term secret was mentioned during few interviews. In other words, sometimes it is good not to reveal all the characteristics such as personality, desire, and story, at least not at once. Other good features for artist brands are partnerships, love, diligence, experience, and good manners. Novelty of an artist Novelty of an artist was not discussed as widely during interviews. However, few comments were given concerning this matter. According to the findings of the interviews, usually, artists are developed little by little and international success does not come right away. Therefore, it is good to understand that sometimes the artist may be old product within his or her domestic markets, while he or she is new within international markets. 5.3.3 Where In chapter 3.3, it was proposed that a new artist needs to target his or her product to target markets and prospects. Therefore, new artists should be able to answer this

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question where, in order to provide as good product as possible to the people. Within next table 20, it is possible to see all the findings of where as a summary. Further, each feature, findings and the empirical results are discussed after the table.

Market analysis

Target market and segmentation

Target prospects and fans

Market demand

Creating new market space, blue oceans

There exists only little research about artists and their images Mainstream radio channels accomplish extensive research People may change favorite artist quickly: what to do and where to go?

Target markets are decided both by artists and their labels Who gets where and in which markets are decided by gatekeepers While markets are fragmented, through partnerships it is possible to position the brand better

Fans determine the new artist‟s success

Demand is high

Fans and gatekeepers determine the new artist‟s success

Oversupply

It is hard to find blue oceans, but record labels still search for them New market spaces are possible to find

There exists oversupply in the music markets; however, there is demand for new artists

Paulina Ahokas

Market analysis is important

Where the artist is respected the most he or she should go there

Consumers change their most favorite band quite easily, therefore, a new artist needs to push the brand towards people and let them Prospect and potential fans will pull the artist if they think that it is good enough

Jimmy Westerlund

New artist needs to trust on his or her instincts

Segmentation is vital for achieving awareness

Juhani Merimaa

Market analysis is hard to accomplish beforehand

Prospects and potential fans create demand

Juhani Kansi

Mainstream radio channels and reality shows like Idols accomplish extensive research

Decision of target market is required also a bit of luck

Image, story, and desire are important both for an artist and also for his or her fans

Markets are limited and new music is pushed and sometimes even forced to markets Target markets are needed to learn and accept

Target groups and potential fans are decided beforehand

Nowadays the demand is based on single releases

Fans determine the new artist‟s success

Trends determine demand

WHERE Jouni Perämaa

Kimmo Valtanen

Jon Lieberberg

Marianne Kiskola

Heta Hyttinen

Market knowledge is based on the intuition of record labels

A new artist needs to push the brand towards people and let them really find you Potential fans are the target prospects

It is possible to create and search for blue oceans

People are willing to listen to music perhaps more than ever, but sometimes they don‟t know where to look for new artists Demand is hard to predict

Consumers are smart and they eventually notice what is good and what is not Oversupply

In the long run, artists should explore more for blue oceans

Sticking with old habits is common

Table 20. Summarized findings of the question where.

Market analysis Market analysis is important within every industry. However, according to the findings of the interviews, usually, there could be achieved more researches about artists and

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their images. One controlling reason for this was that the market knowledge is usually based on the intuition of the record labels. Nevertheless, what people want to listen in mainstream is however accomplished even quite extensively through mainstream radio channels and their research. However, the findings suggest that it is quite challenging to accomplish market analysis beforehand. Trends changes almost weekly and what was new yesterday is old today. Therefore, it is good for individual artist that he or she also trusts on his or her instincts. Target market and segmentation The ultimate factor behind choosing target market can be described as follows: where the artist is respected the most he or she should go there. However, markets are limited and new music is pushed and sometimes even forced to the markets. According to the findings of the interviews, target markets are decided both by artists and their labels. Further, who gets to proceed where and in which markets are ultimately decided by gatekeepers. Therefore, target markets need to be learned and accepted. It was also possible to notice that markets are fragmented and through partnerships it is possible to position the brand better. Therefore, segmentation is vital for achieving awareness. However, while choosing the right potential market, it is good to remember that prospects and potential fans create the demand. Target prospects and fans Without any fans there would not be successful artists. Therefore, the fans also determine the success of the new artist. According to the findings of the interviews, prospects and potential fans will pull the artist if they think that it is good enough. However, nowadays consumers change their favorite band quite easily. Therefore, a new artist needs also to be pushed towards people and let them really find him or her. However, it is useless to push, if there does not exist any pull. Therefore, it is possible to state that the industry is based both on pull and push. Sometimes the industry tries to decide target groups and potential fans beforehand. Therefore, it is possible again to argue that also gatekeepers determine the new artist‟s success. Market demand Consumers are smart and they eventually notice what is good and what is not. Nowadays, people are consuming music more than ever and they are also willing to listen to music perhaps more than ever, but sometimes they don‟t know where to look for new artists. Therefore, according to the findings of the interviews, the demand for music is high. While the demand is high, also the supply is high. However, there is

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demand for new artists. Although, trends determine demand and what will be popular next is hard to predict. In addition, before the demand was based on artists‟ albums, nowadays, it is based on single releases. Creating new market space, blue oceans Creating new market space was not familiar as a concept. However, according to the findings of the interviews, it is hard to find blue oceans within the music industry, but record labels still search for them. Further, it was also possible to notice that it is possible to create and search for blue oceans. However, the industry seems to be struggling with the dilemma of renewing. Therefore, sticking with the old habits is common. In the long run, new artists should explore more for blue oceans, not stay and target the music and the brand in the red oceans. 5.3.4 When In subchapter 3.4, it was proposed that a new artist needs to have accurate timing, when launching the product to market. Therefore, new artists should be also able to answer this question when, in order to provide as good product as possible to the people. Within next table 21, it is possible to see all the findings of when as a summary. Further, each feature, findings and the empirical results are discussed after the table. Competitive advantage

Market-entry timing

Early or late starter

Jouni Perämaa

It is a must to keep eyes open

Market-entry time needs to be affiliated to springtime

It is useless to launch similar artist at the same time

Kimmo Valtanen

Product needs to be unique

Market entry is not time-sensitive if the product is good enough

Jon Lieberberg

Fans are the key

WHEN

Paulina Ahokas Follow the sound and launch the releases at the right time when it has demand

Jimmy Westerlund Juhani Merimaa

A new artist needs to fight for his or her space

An artist needs to be ready to enter the markets at the right time

Juhani Kansi

Luck is needed sometimes to be able to breakthrough

Market-entry time needs to be affiliated to springtime

Marianne Kiskola

What is more important: money and partnerships or uniqueness?

Market entry and commercialization phase may take time

Heta Hyttinen

Publicity is vital element

Market-entry time needs to be affiliated to spring, however, good music will always find its way to fans

Table 21. Summarized findings of the question when.

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Competitive advantage Competitive advantage was not seen as important, because every artist is an individual creative product. However, few things were possible to explore through comments: a new artist product or brand needs to be unique, fans are the key, and a new artist needs to fight for his or her space. Market-entry timing Market-entry timing was seen one of the key attributes for success. According to the findings of the interviews, a new product launch needs to be affiliated to springtime. However, it was also mentioned that the market entry is not time-sensitive, if the product and music are good enough. Therefore, following the sound and launching the new artist at the right time when he or she has the demand is important. It was also possible to notice that the market entry and commercialization phase may take time. Therefore, an artist needs to be ready to enter the markets when it is his or her turn and time. Early or late starter This topic was not discussed that much during the interviews but according to one finding, it is useless to launch similar artist at the same time. Again, behind this is the same fact as in competitive advantage, every artist is an individual case and creative product. However, there are always artists that imitate someone else and that is never good when trying to achieve success. 5.3.5 Way In subchapter 3.1.5, it was proposed that a new artist should launch the product through profitable distribution channels and using intensive and clever promotion. Therefore, new artists should be able to answer this question the way or how, in order to provide as good product as possible to the people. Within next table 22, it is possible to see all the findings of way as a summary. Further, each feature, findings and the empirical results are discussed after the table.

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Pricing

Distribution

Promotion

Jouni Perämaa

Consumers are not willing to pay about artists physical goods anymore

Radio, TV, Retail stores, and festivals are good distribution channels for artists

Kimmo Valtanen

“Pricing” of an artist is not efficient marketing tool if the artist is not interesting Pricing needs to be done through gigs and merchandizing because they are the main income sources of an artist

YouTube, Spotify and radio are good distribution channels for new artists Touring, TV, radio, and online are good distribution channels

Good marketing communication tools are music magazines, partnerships, Internet and social media, music videos, street teams, and sponsorships Good marketing communication tools are different traditional media, Internet and social media, and Spotify or similar Good promotion tools are radio, press, Online, gigs, and overall creating the buzz

WAY

Jon Lieberberg

Paulina Ahokas

Retail stores, Internet, and radio are good distribution channels for new artists

Good marketing communication tools are social media and digital and traditional media; knowing specifically about music fan behavior is key

Good marketing communication tools are Emarketing, social media, word-of-mouth marketing, and both digital and traditional media Good marketing communication tools are social media, word-of-marketing, partnerships and sponsor contracts

Jimmy Westerlund

Through recordings it is impossible to make money

Juhani Merimaa

Free music distribution has forced artists to concentrate more on touring

Spotify is good distribution channel for new artists

Juhani Kansi

Consumers want everything for free; however, they are willing to pay high price concert tickets. You cannot put a price for an artist in these days

Radio is good distribution channel for new artists

Radio and TV are the main distribution channels for artists

Marianne Kiskola

Heta Hyttinen

Income policy of artists and record labels are also going through change

LP –era could rise once again

Good marketing communication tools are radio, magazines, publicity, word-of-mouth marketing, TV, networking, and Internet and social media To promote yourself, you need to be interesting not only musically but your characteristics are vital too

Table 22. Summarized findings of the question the way.

Pricing Pricing was also a topic that was not discussed as widely by means of marketing tool. Reason behind this was that the revenue policy of artists and record labels are also going through a change. According to the findings of the interviews, if the artist is not interesting, pricing of an artist is not an efficient marketing tool. One important fact to understand is that consumers want everything for free and they are not willing to pay almost about anything. The majority is not willing to pay for physical goods anymore and through recordings it is almost impossible to produce any revenues. Actually, the revenues of an artist come nowadays mainly from gigs and merchandizing. Further, free music distribution has forced artists to concentrate more on touring, because people are willing to pay high price for concert tickets. Pricing of a new artist is a large dilemma. It seems that the price tags of artists are partly ripped off at the moment.

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Distribution Distribution and promotion was understood as a same concept during some interviews. However, the findings of present study suggest that radio, TV, retail stores, Internet, online (YouTube, MySpace and Spotify), and festivals and touring are good distribution channels for new artists. It was also mentioned that physical recordings, such as LP record, could rise once again. When deciding the right distribution channels, it is good to choose them through realism and also using only those channels through which it is possible to reach target prospects the best way possible. Promotion According to the findings of the interviews, good marketing communication tools for new artists are Internet and social media, radio, gigs, traditional media and music magazines, TV and music videos, good publicity, street teams and word-of-mouthmarketing, and sponsor contracts and partnerships. A new artist needs to understand that he or she needs to be interesting not only musically but through characteristics too. It was also possible to notice that each promotion tool has a certain task. The process was usually described as follows: firstly, an artist‟s music is promoted and played in the radios. However, in which commercial radio stations‟ playlist the music will end up, is always based on partnerships between record labels and radio stations. Secondly, magazines tell the story behind an artist. Sometimes the fact is that people are more interested about the brand and its features than the music itself. Nevertheless, new artists need to gain free press stories with story behind rather than to have a boring advertisement in a magazine. Thirdly, the Internet and social media need to be handled exceptionally well in these days. It is a challenging field, but it has also created good opportunities. Fourthly, a new artist needs to take care of his or her own positive publicity. It is important to attend the right events, where the media is also represented. In other words, a new artist cannot choose in which event he or she should go – it is a must to attend. Fifthly, it is important to get as much gigs and concerts as possible. You need to perform and to be able to get recognized. Sixthly, when an artist has a certain amount of fans, it is important to get them to act positively for the artist. Fans that promote artists are called street teams. Street teams usually do crucial PR work for artists. Seventhly, networking is highly important. As stated already within this study, music business is based on partnerships and to be able to work with best professionals new artists need to reach their attention first.

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5.3.6 Win Previous strategic and tactical decisions, questions from why to way, have strong impact on the performance of an artist. In chapter 3.6, it was proposed that the performance of an artist determine the success of the artist product. Therefore, in order to perform well in the markets, new artists should be able to answer these previous five questions as comprehensively as possible. The idea of this chapter is to evidence all the characteristics of a new artist that he or she needs to possess, in order to win the markets. Within next table 23, it is possible to see all the findings of win as a summary. Further, each feature, findings and the empirical results are discussed after the table.

WIN

Win

Loss

Jouni Perämaa

Good songs and ability to share his or her feelings

Kimmo Valtanen

Image, story, partnerships, the music itself, desire, excellence, and single releases

Heavily concentrating on album releases and unwillingness to be involved within this industry

Jon Lieberberg

Cleverness

Change resistance and incorrect branding

Paulina Ahokas

the music itself, love, diligence, and talent or eye-for-thegame

While all the possible resources would have been used to promote an artist, it still sometimes is not enough

Jimmy Westerlund

Style, personality, control, professionalism, and love

Low investments, ego, change resistance, and willingness to learn

Juhani Merimaa

Gatekeepers, talent, luck, partnerships, and personality

Because of the oversupply, all the artists are not able to breakthrough

Juhani Kansi

The music itself, control, desire, professionalism, work morality, and luck

Marianne Kiskola

Nowadays, you don‟t even need to be that talented singer because external features have more importance. Charisma and attitude are vital Humanity, personality, and excellent music

Heta Hyttinen

If an artist is narrow-minded

Table 23. Summarized findings of the conclusion win.

Win According to the findings of the interviews, it is possible to list the characteristics of successful artists, which are good music, personality, ability to share his or her feelings, winning the trust of gatekeepers, love for music, diligence, talent, eye-for-the-game, attitude, charisma, image, story, desire, professionalism, control, work morality excellence, cleverness, partnerships, timing, and luck. Of course, it is not the purpose, to possess all the features in the previous list. However, those characteristics were found to

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have important role during the process of launch. It was also possible to notice that sometimes even the talent and the sound of the voice is not that important, if the artist has something else to give externally, which further appeals to people. Loss The opposite of success is naturally loss. Because of the oversupply, all the artists are not able to breakthrough and those who will not survive, the markets naturally direct them out. However, extremely good artists are predicted always to avoid failure. According to the findings of this study, the characteristics of failure are at least low investments, big ego, change resistance, and unwillingness to learn. Further, if a new artist heavily concentrates on the album releases and unwillingness to be involved within this industry, he or she presumably will face loss at some point. Findings also reveal that the incorrect branding may lead to failure. However, while all available resources would have been used to promote an artist, it is sometimes still not enough, if the music and the brand are not appealing enough.

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6. SUMMARY, DISCUSSION AND IMPLICATIONS

6.1 Summary of the Study The main purpose of this research was to study both strategic and tactical new product launch decisions and their impact on performance of an artist within the music industry. Therefore, the main objective for the study was to investigate and understand strategic and tactical new product launch decisions when entering markets and, further, how these two groups of decisions impact on new product performance. Objectives of the study were divided further in theoretical and empirical objectives. These objectives differed from each other only slightly. The purpose of the theoretical objectives was to clarify and understand strategic and tactical launch decisions and performance overall based on previous literature. The purpose of the empirical objectives was, on the other hand, to describe how strategic and tactical launch decisions should be taken under consideration in case of a new artist within the music industry. Through fulfilling the theoretical objectives it was possible to create a framework of 6W‟s that described the importance of launch decisions of a new artist within the music industry, which further fulfilled the empirical objectives. The framework of the study was based on previous literature (Hultink et al. 1997; Garrido-Rubio and Polo Redondo 2005; Chiu et al. 2006) of strategic and tactical new product launch decisions and their impact on new product performance. The framework was consisted of six different parts, five questions and one conclusion. Strategic and tactical launch decisions were examined in chapter 2 and the theoretical framework and the parts of it were introduced within chapter 3 through music industry perspective. The focus of the framework was to concentrate on five questions of strategic and tactical launch decisions, which were why, what, where, when, and the way. The importance of answering in these five questions as adequately as possible was to comprise a conclusion, win. The research methodology was presented in chapter 4. The empirical part of this study was conducted as a qualitative study through interviews. Total of nine interviews were conducted with music industry professionals by personal meetings, each interview lasting from thirty-five minutes to almost two hours. The interviews were completed as middle form of semi-structured and unstructured interviews while the theme and phenomenon acquired more open-discuss. Each of the chosen respondents had been

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working within different or related fields of music industry for years, from five to thirty years. It was important that the interviewed professionals represented different or related fields of the industry because by conducting the empirical study as widely as possible, it was possible to gather more versatile information and data. Two of these interviews were accomplished in Los Angeles (USA) during October 2010 and other seven in Helsinki region (Finland) during January and February 2011. The empirical findings of the nine interviews were presented and analyzed in chapter 5. The research method for this study was content analysis. The empirical findings were processed through content analysis in order to answer research question proposed within chapter 1.2. The research question was divided in two: What are the key elements of strategic and tactical decisions that are used when launching an artist to domestic or international markets and, further, how these strategic and tactical decisions have an impact on the performance of an artist? In theory part it was suggested that new product performance is based on how well the strategic and tactical launch decisions are clarified and executed in practice. In other words, it can be stated that winning with new product is based on how well it is prepared within the markets. The results also confirmed this assumption. Further, the results were organized to meet the framework‟s parts. Like already the theoretical framework suggested, also the results showed how it is possible answer to five questions of the framework and what kind of decisions should be taken under consideration while launching a new artist within the music industry. There seems to be similar thoughts about the launch process itself. However, it was interesting to notice how the questions produced different comments and arguments. Finally, when exploring the previous literature and the framework of this study, it is possible to argue that they possess the same features. However, within the framework, the features of overall new product launch strategy were organized slightly differently and with few additions. In theoretical part, strategic launch decisions were broken down in product strategy, market strategy, competitive strategy, and company strategy. Further, tactical launch decisions were broken down according to marketing mix four P‟s, which are product, price, place, and promotion. In next table 24, it is possible to see how theory based features are divided in the framework and vice versa. In addition, while these features were divided in the framework under each five question and one conclusion, it was more logical to start to explore and classify the new product launch decisions of a new artist within the music industry. The framework of 6W‟s provided also a possibility to discuss theory and the secondary data already in chapter 3, with few references from the interviews. Further, theoretical framework, the model of 6W‟s, was

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used as a tool while accomplishing content analysis of empirical data; abbreviated comments, findings and results, which were processed in chapter 5.

Theory Title

Feature

Framework Question

Feature

MOTIVES FOR INTERNATIONALIZATION AND COMMERCIALIZATION Motives to Push and pull Why Towards international or domestic internationalize markets Motives to Why, what, where, when, Basis of the questions of framework commercialize and how STRATEGIC LAUNCH DECISIONS Market analysis and Market analysis Where Market analysis goal setting Goal setting Why Goal setting Product strategy Product and service What Artist idea + An artist is a product Novelty of a product What Novelty of an artist Product differentiation What Differentiation Product position What Positioning Market strategy Target market and Where Target market and segmentation + segmentation Target prospects and fans Market demand Where Market demand Creating new market space Where Creating new market space, blue oceans when entering markets Competitive strategy Competitive advantage When Competitive advantage Timing and time pacing When Market-entry timing Early, follow or late starter When Early or late starter Company strategy Organizational structure Why Company behind an artist + Company strategy Industry Why Music industry environment TACTICAL LAUNCH DECISIONS Product Product and product What An artist is a product advantage Brand What Brand and key characteristics of an artist Price Pricing Way Pricing Place and distribution Distribution Way Distribution Promotion Promotion Way Marketing communications PERFORMANCE New product Success Win Win performance Failure Win Loss

Table 24. Comparison of theory and framework.

6.2 Discussion and Conclusions Whereas high-tech markets are characterized as fast moving, expensive, risky, and entrepreneurial (Beard and Easingwood 1996: 88), music markets are also possible to characterize at least as fast moving, risky, and entrepreneurial. From marketing point of view it could be seen that music industry needs to be more proactive than reactive. The findings of the study suggest that while music industry has been changing radically within last ten or so years, the industry and its actor‟s resisted change too long and,

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therefore, the industry has been performing reactively. This has also brought changes to commercialization of new artists. Especially, major record labels seem to bring quite risk-free artists to the mainstream markets, because they do not afford to test the markets with as many new artists as they used to before. Therefore, it is good to clarify that the traditional recording industry is not as profitable as before and obviously they need to make changes within company strategies and play safe. However, to be successful, a new artist needs to create and have his or her own place in the markets, and differ at least slightly from other similar artists. The findings and results of the study suggest that artists can be seen as products that need to be branded in order to survive within the challenging music markets. One of the most interesting findings related to this was actually that an artist needs to accept that he or she is a product or a brand. Nevertheless, if that fact is not possible to accept, the performance is expected to be worse than possible to achieve. With close relation with this was that an artist needs to know what he or she is willing to achieve. Therefore, goal setting has vital importance within the process of launch. Goals are possible to set in the individual level and together with background organization. However, the basis for an artist should always be the music itself. After the music and brand are appealing and reach the prospects, it is much easier to approach fans. The features company behind an artist and company strategy were also argued comprehensively according to the findings. Most of the interviewed professionals suggested that while trying to reach success and especially international success, it is a necessity for an artist that he or she at some point will be signed to a major label, at least some level. Results also suggested that if an artist tries to reach awareness widely, he or she needs to have good background organization, good partnerships, good manager, and great strategy how to approach prospects and possible fans. In other words, the machinery of an artist needs to pass gatekeepers and other industry limiting factors and actors, such as executives in radio stations, and concert and festival arrangers. In addition, if a mainstream artist is willing to pass the international level, then he or she needs to be first popular in his or her own domestic markets. For this study one highly important finding is that music industry and labels are not testing and analyzing the market as they used to for instance twenty or thirty years ago. The music industry is changing and the competition is intense. Therefore, record labels cannot sign as many artists as they used to and test their music within consumers. That has actually led to a new kind of music making – making records at home. This kind of

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music making has been around us actually already quite a long time. Findings addressed that this is a certain challenge for record labels, because in this modern world of technology, there is a possibility to reach quite broad awareness and popularity among people without the help of record labels. Therefore, it is presumable that especially major record labels need to see the markets broader than they have seen before. Record labels should start making more intense research how actually their successful artists are seen in the eyes of consumers. According to the findings this is not done as widely because of two reasons: the industry people do not know how to exploit the data and, on the other hand, every artist is a different story with its unique “arc” of drama. Results of the study also suggest that there is the status of oversupply within the markets. Therefore, an artist needs to differentiate him or herself especially through personality. Further, it is possible to make alternative sales and distribution channels decisions, but the charisma and appealing of the characteristics have important role while reaching target markets and target prospects. Therefore, a new artist needs to position him or herself in a way that no one has done before and also in a way that the image of the artist is appealing, which further roots in the minds of prospects and fans. However, while an artist would be appealing and talented, sometimes there is still not enough room within the markets. As any other markets within any other industry, also the size of music markets is limited. Therefore, the results of the study suggest that the role of gatekeepers is at the same time restrictive but also important and valuable. Related to previous, it seems to be that, especially, within mainstream music markets that “who gets where and when”, is decided by gatekeepers. However, within the same gasp is possible to argue that fans are still the key to success. If an artist is possible to create a fan base unseen before, the success is inevitable. Findings and results suggest that while target markets and potential fans would be decided beforehand and the product would be pushed to the markets, prospects and potential fans will pull the artist, if they think that it is good enough. In other words, people determine the demand and the industry, record labels, and artists should be able to answer the demand. Competition and timing were also features that were discussed. Especially, timing was seen important. Results suggest that an artist needs to be at the right time at the right place. Competition was not seen as important as within a consumer product that is first bought, consumed, spent, eaten away, dressed, and finally wasted. However, it is possible to argue that in a way also an artist is consumed and wasted. In any case, the competition is still different. Study findings revealed that it is sometimes more of luck that an artist receives a possibility to be launched in a broader scale within mainstream

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music markets. Therefore, the importance of machinery behind an artist can be seen as a crucial element; a new artist needs to fight for his or her space. Results also supported the role of timing. Findings and results suggest that for new artist, it is good that if the music and the product is launched during spring time. However, it was also argued that timing is not relevant, if the product and music is good enough. The arguments behind “to launch in spring” were based on the fact that there is always more room for new music in spring time. Especially, the gatekeepers and the bookers of summer festivals are more active during spring time, while finding performers to the upcoming summer festivals. That is obviously good to take under consideration, because through summer festivals, it is possible to reach more prospects and potential fans. Distribution and promotion were also discussed broadly. Features of distribution and promotion were seen partly on top of each other, because while music is distributed it naturally at the same time promotes the artist further. Findings support that the role of radio is still vital when distributing mainstream music. However, the importance of Internet and different online services are growing all the time. Chosen distribution channel reflects the goal setting of a new artist. The findings support the fact that some mainstream artists are distributed wider and some not. Promotion on the other hand was seen quite standardized. The most common process of promotion was described in the results of the question „the way‟ in subchapter 5.3.5. The chosen marketing communications mix also reflects the goal setting of an artist. However, findings suggest that the tools of marketing communications should be chosen extensively and by means what the target group is. In addition, as also stated in results, a new artist needs to be interesting both musically and through his or her characteristics. In other words, both the content and the context need to be appealing. According to the results there were also few features that did not achieve as much attention as others, which were either hard to combine within this industry related matters or they have not been recognized as important within the process for some reason. These features were the novelty of an artist, creating new market space, artist pricing and early or late starter. There were only few findings concerning the novelty of a new artist. Both findings suggest that most of the new products are first new for the company. After companies have found a potential artist, they are capable to take him or her to the next level, towards international markets. That is naturally the phase when the artist becomes new to the international markets. Creating new market space was the second feature that did not also receive that much attention. It is possible to argue that the music industry might be still partly sticking with the old habits and while Internet

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has enabled to listen to music easily record labels are slow with their counterattacks. Especially, record labels could pay even more attention to fresh and renewed markets, where they could offer music widely, but also profitably both to the company and its artists. It is presumable that while people would need to pay for the music, they would still listen to music as before. This matter is changing better all the time, but it is hard to predict where it is going to end up. This has close relation to artist‟s pricing, which were also discussed mainly through the revenues of artists. As the results suggest, the price tags of artists are ripped off at the moment, at least partly. The reason lies under the fact of technological developments and the overall change within the industry. Recordings do not sell anymore and the price has been transformed to the prices of the concerts. Findings suggest the sad truth that while music is listened possibly more than ever and there are more places where to distribute and promote music, the income streams have shrank within last ten years. Therefore, it was possible to notice through few interviews that the position of both new and old artists has gotten worse financially. Last feature that did not receive as much attention was the matter of early or late starter. The only finding concerning this was that it is useless to launch similar artists at the same time. Finally, the findings and results point out that the launch of a new artist should be seen as a similar process than any product launch. Therefore, it is possible to suggest that strategic and tactical launch decisions of a new artist have impact on his or her success. Further on, it is possible to argue that the process of a new artist should be seen as the sum of variety of decisions that should be taken under consideration long before the moment of actual commercialization. These decisions or features were explored, described and evidenced both theoretically and empirically in this study. Itself the launch is one small part of itself the new artist launch process. Therefore, it is presumable that the strategy is also one vital factor of how successful or winning the artist product will eventually be. In other words, not only the music, the characteristics, and the eventual product or brand configure the success of a new artist. In this study the model of 6W‟s were developed for the reason that it was possible to structure more clearly what kind of questions a new artist, his or her manager, background organization, and record label should be able to answer when releasing the new winning product, the new potential successful artist, towards either domestic or international markets.

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6.3 Implications It was possible to notice few restrictive factors while conducting the study. This study was challenging to execute, because while product launch decisions and strategies have been studied quite broadly theoretically, the empirical side of the research area has not received that much support and evidence. Further, to combine the theoretical background within creative industry caused even more challenge for the execution of the study. Also to reach the interviewed professionals was another challenge. As within any other industry, people are busy, therefore, to even reach the wanted amount of professionals was difficult. Five out of nine of the interviews or meetings were arranged through personal relationships. Further, after processing the comments and findings, all the summarized tables were sent to interviewed professionals. During the execution phase of the results, few even quite important comments were asked to be eliminated at the request of the interviewees. The conclusions, results and further assumptions need to be employed cautiously, because for instance through a case study, it would be possible to see how these features would apply in practice. Therefore, it would be interesting to see how these chosen decisions or features in the model of 6W’s would be possible to apply in reality? Also a wider and longitudinal research would offer more applicable conclusions and further see what kind of impact these features and decisions have on actual artist release and the performance of an artist. Therefore, it would be interesting to repeat the study within a few years in a broader scale as a case study. It would be interesting also to separate each question to its own research area. Through more detailed research, it would be possible to study how the background organization of an artist is built, how the artist brand is built, how the target markets are analyzed and chosen, how the timing decisions are taken under consideration, and how the actual distribution and promotion is executed. Another closely related theme for the future research would be to examine what kind of expectations consumers have, when a new artist is released within mainstream markets. This could be possible to contribute for instance through a consumer survey study combined with few interviews to get more accurate information. From the managerial perspective it is good to understand that the process of launch is not easy to complete. Therefore, the leadership and management of the process have vital importance. As Lambertz and Geckeler (1996: 180-181) state: there are no mistakes that have not been done countless times before. Secondly, many of those mistakes do more likely have something to do with the weaknesses of humans. Thirdly,

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analysis mistakes within process of NPD development are considered to be sensible because often these mistakes are identified to a person that has made the mistake. Therefore, it is good to understand that also mistakes and aberrations are common within product launches. In other words, it is important to learn from mistakes. However, the leader of the launch process needs to move fast and keep pace (Davenport 1993: 283). In the process of launch or commercialization, it is important to pay attention to factors such as time-use, available resources, and budgets (Lambertz & Geckeler 1996: 179). Trott (1998: 365) claims that the actual first thing that the manager needs to do, is to decide within the organization the extent to which they wish to invest in their product and thereby develop it. These choices will have impact on the returns (ROI) of the organization and will determine investment decisions for the future of the brand. Further, operational activities that management needs to take care of are: marketing plan, adaptation, product implementation, control, monitor, and budget. As it is also possible to notice in findings, these previous stated factors are obviously important from the view of an artist manager and background organization of an artist.

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Interviewed professionals 10/2010 Name

Title

Employer

Location

Jon Lieberberg

International Touring

Live Nation

Los Angeles, USA

Jimmy Westerlund

Music Producer

Freelancer

Los Angeles, USA

Name

Title

Employer

Location

Heta Hyttinen

Music Journalist

Freelance/Pop Media

Helsinki, FIN

Jouni Perämaa

Marketing director

Warner Music Finland

Helsinki, FIN

Marianne Kiskola

Ex-radio journalist

Yle Pop Music, 1990-93 Helsinki, FIN

Kimmo Valtanen

CEO

Sony Music Finland

Espoo, FIN

Juhani Kansi

Head of Operations

Yle Popular Music

Helsinki, FIN

Paulina Ahokas

CEO (MUSEX)

Fin Music Export Assoc. Helsinki, FIN

Name

Title

Employer

Location

Juhani Merimaa

CEO

Tavastia, Ruisrock

Helsinki, FIN

01/2011

02/2011

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APPENDIX Appendix 1. Interview structure Background information Name: Sex (male/female): Work title: Company: Work experience and education: 1. (Related to background information questions.) Would you please tell me about yourself and what is your history in the music industry? What is your exact position right now? 2. Different media has been argued that music industry has been confronting big changes within the last ten years. Mainly the reasons are explained because of the development of information technology. However, how do you see the music industry of today? Do you think that the music industry and its different actors have found consumers again through different profitable ways to do business? What is the future of physical CDs and LP‟s? 3. Do you think that an artist can be compared to consumer or industrial product? How? 4. Process (these next six strategic and tactical aspects were discussed quite openly, but the following themes were discussed almost in every cases) 4.1 Why When it is affordable to internationalize an artist? Goal setting? 4.2 What What are the most important characteristics that an artist needs to possess? What is sold when a new artist is launched to markets? What kind of an artist will survive today and in the future within the mainstream popular music industry? 4.3 To Whom How the primary target group is defined?

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How it is able to ensure that the primary target customer or prospect group is reached? How the promotion and distribution are focused on them? 4.4 Where How the market(s) of new artists are chosen? (Domestic, straight to the international markets, international markets after domestic market success) How much an artist is involved in this process of choosing markets? What about the roles of positioning, differentiation, and segmentation? 4.5 When What is the role of timing in launch process? (Demand/JIT and annual time frames when to release singles or albums) Is there any competition within the markets? If the answer is yes, what kind of competition needs to be taken under consideration? 4.6 How The importance of marketing plan? How specific are these plans? What kinds of steps are included? The importance of product and brand value? The importance of price? How is it possible to set the price for an artist? (Concerts, releases, coproducts) What are the main distribution channels when launching a new product? What are the main promotion tools when launching an artist? IF TIME. 5. How many demos are sent to labels/music magazines/other media every year? Which one is more important factor for an upcoming artist to do: to record and release music or to perform? 6. Do you think that record labels, producing and publishing companies try to push new artists and their music in the popular music markets? Or is it more consumer-driven (pull)? 7. What about creating new market spaces. Do you think that the music industry and its actors are trying to find new solutions to distribute and promote new artists (and even older artists)?