Hi, need to submit a 5000 words essay on the topic The Digital Music Market: Apple iTunes.
Apple iTunes’ market entry strategy into the UK is more likely to succeed if carried out with much more concentration on customer satisfaction and value creation fronts while at the same time focusing on a market penetration pricing strategy coupled with incremental growth strategies in niche market centric operations.
.Operated and managed by Apple Inc. the iTunes Store is a software-based online digital media store. It was opened as the “iTunes Music Store” on April 28, 2003 (www.images.apple.com). According to a research study conducted by London based researcher Xtn Data, it was mentioned that Apple’s iTunes Music store has a larger share of the UK digital music download market than the sum total of its competitors put together, i.e. accounting for about 54% of the market. It has been reported that as the demand for digital music has increased along with Apple’s market share (www.apple/tunes.com).
.Apple maintains a good brand image. Thus it has a loyal customer base that helps to recruit new customers and to retain them. Thus its customers are enticed to buy new products such as iTunes when it was introduced (Dunmore, 2008).
.There is tremendous pressure on Apple from the music industry itself to increase the price of its music downloads. This is because as digital music has become popular the music industry makes more money from iTunes (i.e. downloadable music files) than from their original CD sales. So far the company has not given in to this pressure, but if it gives in, it will be seen as a commercial weakness.
.Apple has had a long-standing contractual relationship with IBM to supply it with chips. In early 2005 Apple threatened to terminate this relationship, and switch on to IBM’s rival Intel. Some industry people are of the opinion that this change could confuse Apple’s customers (Hart-Davis, 2009).