PROBLEMS IDENTIFICATION

o New technology:• No competitors in the same field• No certificate or technical approval for HSS

from a third party• Trustable: customers (all labels, producers

or artists) have still not been “convinced” by the efficiency of Polyphonic’s provided services: using math to measure emotion activities;

o Not defined marketing plan:• The management was still seeking a clear

and detail plan for their product & service marketing

• They have not focused on a target marketyet

STRATEGIC ISSUES

o Polyphonic needs money immediatelyo Limited Budget of 150.000 $ so Polyphonic

can choose only one target marketo After choosing the target market, Polyphonic

has to choose Marketing approach (4P)• Price• Placement (positioning)• Promotion• Product

Criteria Labels Producer Artist

Profitability 1 2 3

Market size 3 2 1

Customercircle-life

1 2 3

Marketing costs 3 2 1

Price 1 2 3

ANALYSIS Internal parameters:

• FC: 500.000$• Investments: 600.000$ development of HSS

150.000$ marketing budget• VC: 300$ per album (10 songs)

External parameters:• Traditional methods cost: from 3.000$ to 10.000$ per song• Promotional cost for singles: from 300.000$ to 1.000.000$

Capacity:• 2 hours to analyze album • 4 album per day (8 hours), 20 per week(5 days), 1.000 per

years (50 weeks).• 30.000 albums every year, 22.500 album under majors (75%

of the market) BEP price: [500.000$+(300$x1.000)]:1.000=800$ Assumed a hypothetical price of 10.000$ (premium price) per

album analysis for offering the Labels• Full capacity:

(10.000$x1.000)-[500.000$+(300$x1.000)]=9.200.000$• Minimum quantity to cover FC per year:

10.000$x50 = FC = 500.000$ Minimum Q= 50 albums

RECOMMENDATIONS

Target Market :

• Polyphonic should be focused on the Labels segment because this segment has the highest possibility to gain fast revenue in bigger quantities, and should guarantee a long customer circle-life.

Price :

• The price should be about 10.000$ per album, to be a top price which ensures a sustainable revenue and represents the high quality and the uniqueness of the product.

Selling approach :

• Polyphonic has to address directly to the record labels (B2B) and should give free-demonstrations for each majors (1-2 albums per major) in order to persuade the labels and prove the efficiency of HSS product.

Positioning :

• They have to concentrate their marketing campaign on the success rate (80%) which helps labels in costs savings (eliminating marketing costs due to releases of unsuccessful songs). Therefore, Labels will mainly invest in future hits and won’t lose money in songs which do not have a potential to becomehits.