business planPLATINUM RECORDS

Hussain, Sharif(09-12870-1)Haque, Md. Emranul(09-12859-1)Talukder, Urmila(09-13492-1)Islam, Rabeya(09-13093-1)Summi, Adhnin Akter(09-13033-)Marwan, Shariful Islam(09-12874-1)

Executive summaryThe business plan of PLATINUM RECORDS Ltd has been developed by us four motivated students who are studying at the North South University School of Business. The academic purpose of this report is to understand and apply the theoretical subject knowledge that we have learned so far.The whole process of the development of this business plan has lasted for almost a month. The business plan consists of the following parts as described below.What is the report about? (Brief synopsis)1) The business we described is a record label company Platinum records to be established in Gulshan. The company will be registered in Dhaka, Bangladesh. The owners of the business are four students with depth of knowledge in management, marketing, finance and law.. The organizational company structure is a framework of operation with clear task description.2) We are a customer-oriented company, which offers services and products which are music based and. To do this we will have special state of the art equipment and artists.3) We require an initial fund of around taka 16,339,580 of which the break down of the composition is as given in the financial statements accompanied.The plan starts with an analysis of the opportunity, followed by an in-depth look at the products and service that we want to cater to. Then we have analyzed the Bangladeshi market in our marketing analysis and the Bangladeshi music industry in the industry analysis by doing the PEST analysis and aso analyzing the product life cycle. We also looked at the competition analysis where we identified some major players in this business.The marketing plan identified the potential caveats and opportunities of the marketing strategies and we described our marketing mix and promotional strategies.Finally after describing the management team and the manufacturing and delivery process we finished up by giving an in depth financial analysis which is the broadest part of this plan.Platinums primary objective is to promote, preserve and develop quality Bangla music and thereby stimulate musical creativity in the country. As a music label, Platinum prioritizes musical talents arising out of Bangladesh for production - singers, songwriters, instrumentalists, composers etc. - old or new, individuals or groups are encouraged and supported by the company. Platinum will capitalize on the growing entertainment market across the country through the production and promotion of high quality entertainment. Located in Gulshan the company will become highly profitable through the sale of pre-recorded music product (Compact Discs / DVD, Internet Music Downloads), and also revenues generated from additional profit centers. Platinum will own and control the masters (master copies), copyrights and licenses of its product, which will enable Platinum to create immediate revenue streams while growing its music catalogue into a million dollar success.

OpportunitiesIf we consider the present condition of Bangladesh Music industry than we could say that there are a whole lot of opportunities opening up for the new investors, as the present recording companies which are our main competitors are unable to satisfy their customers in terms of distribution due to the lack of knowledge about the market and how they should promote an artist. This is where we could grab the chance to serve music industry with utmost efficiency and can also show up some good profits to our investors. THE INMDUSTRY IS CONSTANTLY FROWING AT AN AVERAGE OF 12% WITH HIGHER RATES IN THE FUTURE (BANGLADESHINFO.COM). In Bangladesh the number of talented sound engineers and young musicians are increasing nowadays, who are waiting to be hired and the market price of these employees is quite cheap. So getting effecient and talented employees with reasonable pay sclae will be easierAnother major opportunity or extra advantage we have is one of our marketing manger is a singer and have extensive public relationship network with music industry. So we are considering that this is going to be our additional point to explore the music industry at AN advanced level.We are also considering FORMING a startegic allience with the biggest distribution network I-speed, so that we can reach to the core listeners with massive distribution process which is a big weakness of our competitors. The Recent evolution of many Fm radio stations IS playing a vital role in promoting and taking the music to listeners. It has opened up a great opportunity for our business.

In recent years we have seen a positive relationship between the Movie and Music industries. Many movies have recently started to outsource their music, for instance, good example could be Monpura, Jago, Moner maje tumi etc. That meanS the movie music is no longer are limited inside the FDC. We also can rent out our recording studio to other Musicians, which could be a source of our earnings as well.Musicians have raised their voice and working against piracy due to this piracy which is quite a severe problem in Bangladesh. The music industry has faced high time losses but the growing awareness against piracy is going to help us to minimize such kind of losses. Bangladeshi listeners have started to apprEciate the different types of music coming out everyday. So we dont have to look only for the traditonal songs/singers to market our product. We are not the new investors in this sector. Today we can identify the music business as an industry. It is growing with high phase. Although we are a new comer, but the industry is quite matured, so that gives us the chance to learn from others MISTAKES (FROM other companies in the industry).We can easily overcome or avoid all those losses that they have incurred. Finally, we believe our prime objective is not only to enter the music market to BE PROFITABLE but to also promote good music all over the country.

The Product and Services of Platinum

Platinum will provide CDs and DVDs of artists under exclusive contracts. Artists will be chosen from demos (for upcoming and new artists) and from present market value. The products will be: audio CDs and DVDs of music videos. Services to be provided will be: Recording facilities Production facilities Video making facilities Royalty to artists Marketing Copyrights of Platinum on the albumsAnnually around 2 solo albums, 2 mainstream band albums and one exclusive introduction album will be released from Platinums label. The solo albums can be of a male artist or a female artist depending on his or her market value. The criteria will be the same for bands. The one exclusive band or artist to be introduced will be chosen through demos and auditions and then will be exclusively launched. Artists will be signed in for three straight albums over whatever period the artists would release albums. The contract will include two free music videos, 100 free CDs, and a royalty at sales of 6 taka per CD. The one important part of the contract with artists will be that if the artist would want to release his or album from Platinums label then all recordings would have to be done from Platinums studios. Artists will be given two options:Option APlatinum will bear all costs of producing and marketing of three albums maximum and the videos and the artist will get 6 taka per CD sale either annually or quarterly, as Royalty.Option BThe artist will bear all production costs (studio cost, arrangement cost, and music directors cost), the marketing costs will be borne by Platinum, and the artist will get a royalty of 6 TK as stated above and a token money.

Sponsorship facilities:Sponsorships always help for an albums release. It is mostly used for marketing purposes and it may also facilitate the studio payments for an artiste. Here two options will be available for the artistes and the company:Option AIf the artistes bring in sponsorship, the amount will be divided on a 60%-40% basis. The artiste will get to keep 60% of the total amount and 40 % will go to Platinum.Option BIf the artiste fails to bring any sponsor and requests the company to arrange a sponsor the division will be on a 40-60 basis; 60% going to Platinum and 40% going to the artist.All CDs will be copy protected through a special technology and all music produced will be copyrighted under Platinums label. Songs will be available on CDs and DVDs and only on www.amadergaan.com for sale.

Marketing ANALYSISMarketing researchHaving on hand the information obtained at the first stage, we analyzed it and came to the conclusion that we needed the information that could not be acquired from the secondary data sources any more. Thus, we faced the need for marketing research focused on our potential customers.Firstly, we defined what kind of information we needed. Descriptive information:a) Customers profile, including lifestyle, demographic and economic characteristics of our target group. b) How far do they live from Groningen? Means of transport they use. Their attitude towards our service: are they inclined to come? Why yes or why not? Causal information:a) How many of them would like to come? The demand for our service.b) Will our price appeal to them? Thus, price elasticity.

According to the product life cycle, the industry is in the introductory stage as shown: Justification: Currently there are only 16 players in this industry and there are still a lot of entry opportunities because of the high margin and growth opportunities. The music industry is still in an infant position in this part of the world especially in Bangladesh (except India).Target Market: Our target market includes listeners of all ages and backgrounds. But even then specifically the target market consists of the following segments each with its own unique dimensions and depth:Target market and consumer behavior by genre Pop: Mass. Influenced by the whole market behavior. Folk: Mass. Dedicated to the music they listen to, patriotic and traditional Heavy Metal, Thrash Metal, Alternative Rock: Niche. Loyal listeners who are inspired by western rock music. Classical: Niche. Very small market compared to others but loyal listeners with consistent buying behavior.Market Segments by Service Users: Upcoming bands who are in need of practice facilities. Artists who are in need of state of the art music technology and production facility.

Industry analysisThe industry analysis involves an in depth look at the current situation of this industry. We will also look at the external factors such by doing a PEST analysis and the Porters 5 forces model.

PEST analysis

Political Factors: The political conditions of a country is very crucial for a business to grow and sustain. Issues such as government regulations, taxation policy,controls on merger and acquisition activity, civil unrest,political ideologies etc highly affects the business. The political environment changes all the time, as a result possible changes might occur for our business policy as well. The political parties at a local and federal level and their relationships towards other parties change all the time, which will effect the decisions being made. This can be an advantage or disadvantage for our business. It can concern for example the taxes and subsidies given to our company. If the government decides to give a higher amount of money as a percentage of the total rent for the building being paid, this will be defined as a benefit. If however they decide to reduce the allowed working hours of our employees or the opening hours, this will be encountered as a negative effectEconomic Factors: The economic condition undoubtedly plays a vital role. Issues such as monetary policy, GNP trends, inflation rates, employment(wage rate),disposable income,business cycles etc. For instance, the recession that is currently prevailing might really affect us tremendously provided the recession does not go away any sooner.The economists are predicting of a reverse order by the middle of 2010 which is a very good sign and is thus a positive sign.Societal Factors: Our business is completely dependent on the socio-cultural factors as music totally deals with the culture and social conditions. Demographics, social mobility/ Diversity,lifestyle preferences,levels of education,social values etc are a major concern. The attitudes and lifestyles of people changes all the time, therefore this is a very flexible factor. Besides the people itself, time plays a vital role too. It influences the way of living and it is very important for the type of service we offer. Nowadays people spend more of their time at work or feel a pressure through other ways. At the same time they try to seek relaxation to get rid of or to reduce their everyday pressures. This explains why the public interest for music and relaxation is bigger than ever before. Being and staying healthy is becoming a lifestyle on its own, and our floating service will positively add value towards this

Technological factors: Industry boundaries may change as technology changes and this is specially true for music indistry. New discoveries and innovations,Product life cycles(PLC), Focus of private and Government supported R&D expenditures, effects of new technology on business structure in the country.In our industry technology is a vital factor as new technology in creating new types of music are coming everyday in the industry.This not only drives qualiity and cost reduction but also makes the whole industry very technical with indepth knowledge on the material required.

Porters Five Forces Model

1.Risk of entry by potential competitors: As we are entering the industry the risk is higher, as we wont be able to achieve the economies of scale right away or the brand loyalty in the beginning,in addition government regulations might be an obstacle for entering an indistry.2. Rivalry among established companies: The rivalry among the established companies can be a big threat to us. As they get more competitive they would fully utilize their economies of scale and brand loyalty which we lack. 3. Bargaining powers of buyers : Buyers are dominant. Our business is totally dependant on them. Crucial is buyers disposable income, taste, and how they accept changes. They might also threat to enter the business themselves.4. Bargaining powers of suppliers: The product supplied is vital to the industry and has few substitutes. If suppliers revolts or protests, it would definitely get hard for the industry to survive without the vital ingredients needed to run the industry. Suppliers should be always considered a very important part and while negotiating it should be made sure that their demands are fulfilled. They have the power to close down a company if they wish to.

Competition AnalysisIt is important to understand our competitors in order to design market offers that deliver more value than the offers from competitors, trying to reach the same kind of relaxation seeking customers. By having a good up-to-date knowledge about our competitors and their offerings, we will be able to respond better to their marketing strategies and we can set our prices more competitively. By using this method we can take advantages of our competitors weaknesses and we can improve our own business by observing their successful marketing strategies and by learning from their mistakes. To be well aware of our competitors we will first need to identify the different kinds of competitors we have. After that we will asses them, decide if we want to attack or avoid, and we will design a competitive intelligence system. Direct competitors1.Bengal Music2.Laser-Vision3.G-series4.Shangita5.Sargam6.Gangchil7.Gungun8.Ekter9.Rage

Our competition is in the introductory stage as we have just entered the industry. The music industry in Bangladesh is in a growing stage and it has been intensified with a lot of companies coming in. The record label companies have a severe competition among themselves. The competition is based mainly on the singers, the composers, and the technical expertise. Having said that, even if some company has all these who are extremely talented but fail to promote them properly and efficiently, then they will not succeed and similarly these people needs to be properly motivated with proper compensation package and flexibility. Combining all this, a company needs to survive in the industry. If they are able to do so, only then they can survive and compete. Initially, we would concentrate and try to establish ourselves in the industry by hiring the established singers and composers so that, early in the stage we get success and thus acquire a place in the market. We believe the technical expertise and the instruments we have along with the talented singers and composers, we will eventually be able to capture our target market and in the process become the market leader. In addition to that we plan to promote and distribute music country-wide which the previous companies have failed to do so. To ensure the success we are hiring I-Speed as our distributor who also does the distributing works for Benson n Hedges. Lastly, we have proposed Virgin, India to sign a contract with us, where we plan to promote Bangladeshi artists in India under their banner and Indian artists in Bangladesh under our banner. This will work as an affiliation and open the international path for us.

Our main competitors and our major threats are bascally Laser-vision, G-series, and Rage and this will be explained later in the report.

The right marketing mix for Platinum Records (Marketing Plan)Sales strategy Our released albums are aimed towards segments based on the artists. For example Pop sensation Milas albums would definitely be aimed towards those between the age of 8 to 30. It is surprising how the segment is wide and includes a variety of people but market research available says this story. On the other hand a thrash metal band like Power surge has a target segment of people aged 15 to 25. The strategy for us it to vary according to the demand of the artist in the market. Initially we plan to work with artists like Arnob, Fuad, Habib, Mila, Balam, Miles, LRB, Nogorbaul etc. to increase the value of our label and since these artists have a countrywide appeal sales are meant to be maximum (between 50 thousand to 1 lac copies).Promoting and advertising takes place from Platinum headquarters. We use print ads, teaser ads on television channels, radio soft launching, and ads on entertainment magazines. On the basis of sponsorship of the album promotion is enhanced and it is extended towards billboards and three music videos. Promotion is first done through postering then songs are played on the radio. This is done a week before the launching. At the launching, packages are given to press reporters which include a copy of the CD, a write-up on the artist, a pen, a smart writing pad etc. The first month goes through this initial promotion. Depending on the sales at start up further promotion is done through showing videos and live road shows. Platinum musicians will get maximum exposure through regular performances through indoor and outdoor concerts, acoustic and unplugged shows as well as shows in small venues held both internationally and nationally.

PricingCDs and DVDs are bought at between 18 (13 TK/unit and 5 TK for cover/unit) taka from suppliers. CDs and DVDs do not necessarily have any brands. Then the CDs are written and packaged at the production facility. This CD is then sold to the distributor at 35 TK who sell to retailers at 45 TK.Pricing is standard in the market at 60 Taka for CDs, and 60 Taka to 110 taka and there is not much of a price war or sensitivity. What goes on in the markets is more of a matter of which artist the label is selling.

DistributionDistribution is carried out by a sister concern called I-speed and partly the distribution in North Bengal is outsourced to Sound Machine. Right after the production phase a certain allocated number of CDs are sent to distributors. Initially, the first month, is considered the test month. In the first month only 2500 units of CDs are produced and sent for sales to different outlets all over the country. Based on retailers demand at the middle of the moth more CDs are produced. This is why a real good relationship and PR is needed with I-speed and Sound Machine since they would spend a lot initially to distribute only 2500 pieces of CDs.

Facility Location

Facility location, also known as location analysis, is a branch of operations research concerning itself with mathematical modeling and solution of problems concerning the placement of facilities in order to minimize transportation costs, avoid placing hazardous materials near housing, outperform competitors' facilities, etc. Similarly, we, the management came to a consensus that we wanted to cut costs of course but most importantly put an impact on our clients through our studio location and production location. Given that most of our competitors are located in Moghbazaar we want to situate our facilities in a place more suited to our high quality of product and reputation. We are renting a two story house in Baridhara which is 5000 sq feet and is costing us 120,000 TK per month and we have to pay an advance of 6 months as security. Comparatively, a facility this size would have cost us double the amount but since we have contacts in the real estate through some pre-existing clients we could arrange such a deal.Reasons for choosing this location are as follows:The production facility and production studio being so close help in clear communication between the two units and monitoring of processes.Its relatively cheaper than other choice of locations.The main distributor I-speed is located in Gulshan-2. Moghbazaar, the cheapest location is very crowded and often a killer in terms of traffic jam and load shedding. Most artists live near Baridhara which saves time and helps commuting even during strikes and political unrest. Also locating our facility near AIUB University and some other private universities in Baridhara will help in creating hype about the label and upcoming albums. Students are the biggest and largest listener base. They are also the music trend setters and their word of mouth promotion will be vital for our label in the start.

Finally we have used a confrontation matrix in order to adjust to the changing marketing analysis. The confrontation matrix combines the internal and external factors in order to undertake specific actions or to change course within the marketing strategy. The actions are known as offensive, defensive, adjust and survive. It shows us for example how to use our opportunities by fully using our strengths, or to defend or adjust with our strengths towards the threats. We can also try to strengthen a weakness in order to use an opportunity; think about the point that the customers do not have any experience with us. Because of the external factor of a potential economic growth and the customers purchasing power, they will have more money on hand. They can use this to experience and satisfy their curiosity towards our floating centre, something that might be seen by some people as a luxury where you save money on in times of economic recessions. The table about the confrontation mix speaks for itself; it gives us an indication about how to utilize our strengths and opportunities, and how to reduce the negative impact of the weaknesses and threats. By keeping a close eye on these factors we will be able to prevent the problem that we are going to use the wrong strategies, or that we are not fully maximizing the profitability we can get out of an opportunity.

management Team and Labor

The Founders and Proprietors of Platinum are:

1. Fariba OmarUndergraduate: Bachelor of Business AdministrationMajor: Human Resource Management, MarketingNorth South University

2. Farah SarwarUndergraduate: Bachelor of Business AdministrationMajor: Finance & Accounting, EconomicsNorth South University

3. Nusrat SikandarUndergraduate: Bachelor of Business AdministrationMajor: Human Resource Management, International BusinessNorth South University

4. Quazi Abdullah Al ShahnoorUndergraduate: Bachelor of Business AdministrationMajor: Finance & Accounting, EconomicsNorth South University

Our Key Employees are:

Sound Engineer- Creative head. Has a degree on Sound engineering from India. Has an experience of 3 years in other various Record Level Companies

Music Directors: The names mentioned have been exclusively selected and hired because in the past they have been able to create successful albums.

Factory Technicians: They have been hired because of their good experience on this field.

The Human Resouce Management Plan (organogram)The employees are the most important asset of any organization. Our main objective would be to attract and retain employees with proper compensation packages and motivation.We would have 3 segments in our organization:

The AdministrationThe founders of this organization are 4 partners- that is us, and we would initially run the administration part.Shohan and Farah would handle the Financial part. Fariba is the Head of the Marketing Depertment. Under her 4 employees will work. Nusrat will handle the human resouce department.

The Technical department

We would have 3 divisionsIn-House Music Directors ( Full time employed) Fuad Ibne Rabbi Arnob Hridoy Khan Foad Naser Babu

In-House Sound Engineers- 2Contractual Music Producers Jewel (Miles) Arnab( Bangla) Shuvo

Video Panel Creative Head Video Editor

The Factory Machine Handler- 02 Technician- 02 Electrician- 01 Packaging-02

Manufacturing Equipments Required

Machines and equipments required for the recording and production are: D-Command Music Package Eventide Anthology II Bundle Antares Auto-tune Bias Peak Pro 5 M-Audio Project Mac GS 2.0GHz DP Pcle Video Editing system Genelec 1038B (pair) Microphones System Focusrite Octopre 8 w/24/96 250 Aural Exciter Type III Resson 3.0 Logic Pro 7 Seagate 200GB Firewire SONY HDV Z1 Camera Headphone System

Production and Delivery process

Platinums production process:Platinums involvement in each production begins with the selection of artists, conceptualization of the music to be produced and ends with marketing the product. Selection of artists is through auditions and/or demo-recordings of original materials. Each artist has the choice of working with Platinums music directors, composers, musicians, singers, songwriters, as well as recording technicians. The company has its own graphic designers and video-makers whose visual artistry match the quality of the music produced.In order to reach retailing points all over Bangladesh, Platinum markets its products through professional distributors and wholesalers. It undertakes promotional activities (e.g., public launching ceremony, posters, advertisements, music videos) to stimulate healthy sales. Its networks with media companies ensure the artists continued presence in audio-visual media even after the product is made available in the local market. While the production of Bangladeshi music remains Platinums primary objective, the company intends to expand globally. Platinum plans to sign an agreement with Virgin Music Limited (India) whereby it can access Virgins master copies of recordings by Indian artists and reproduce them for sale in Bangladesh, in the form of cassettes, CDs, VCDs and DVDs, under a joint Platinum-Virgin label. Similarly Virgin can also market Platinum products in India.

Platinums Values and Policies The Artist will generate royalties on their sales, for as long as their musical sells, instead of one-time payments. We believe in treating all our artists with respect and sensitivity Platinum will distribute globally through a tie-up with SAREGAMA, who are well represented in target market segments. Artists signed to the label will be encouraged to musically with one another to the maximum extent possible, drawing on each others strengths and creating a musical synergy never experienced before in Bangladeshi music. Platinum will strive to be closely involved in all aspects of the artists' career, providing continuous support (not just intermittent activity at the time of album release). Platinum musicians will get maximum exposure through regular performances through indoor and outdoor concerts, acoustic and unplugged shows as well as shows in small venues held both internationally. Platinum believes in the highest quality recorded output and will strive to bringing together the best songsters, Lyricists, music directors (producers), arrangers, sound engineers, players of different instruments, singers etc. in different combinations to create music that provides pleasure to the listeners for years to come. Platinum's doors are open to all creative musicians, as we are committed to nurturing talent to full realization. Platinum is fully committed to raising industry standards to international levels through foreign collaborations and transfer of technical expertise in all aspects of the creation of the final product. Platinum believes in the sanctity of the artist's work and creations (whether local or foreign) and inherently opposes any kind of piracy in the music industry. Platinum believes that Bangla music has in the past reached heights of excellence comparable to any music in the world. We are committed to reviving that standard and adding to it through complementary modernization, not wholesale imitation and westernization. In this quest, Platinum is obviously not biased towards any one type of Bangla Music.

FINANCIAL Projections: See Appendix

Exit Plan

Our Exit Plan is as follows:Sell off our company to a financially superior company with high liquidity having a strong brand influence

Justification:The basic idea behind selling off to a multinational company is handing down the ownership of our nurtured company to safe hands who have strong brand equity and can leverage our influence on the market.

The justification behind attractiveness of our company to potential buyers is as follows: The growing industry in Bangladesh State of the art technology and network already created by Platinum records in this market in this geographical area As a hub for further expansion into other geographical area like Nepal, Bhutan, Myanmar.

As we can see from our financial statements that it has been highly debt intensive with high interest expenses. As a result the retained earnings are not enough to reduce debt amounts. If the music industry booms, the situation might be different but there can be worst case scenarios also. As a result, a strong company will buy out the debt and reduce the companys debt liabilities to reduce interest expenses and thus be benefited from the buyout. The process involves complex accounting consequences which are out of our scope of study.