Business Studies Case Study on a Music Industry (With Diagrams)

• This was a gap in the market as there are few talented child singers going public
• Most of the people in their class were willing to buy the CD at a reasonable price, his juniors and seniors were also willing to buy,
• There would be an excitement about the album only for he first few weeks as the three of them had built considerable hype for the launch of the event,
• Knowing Benny personally helped as people knew that they could associate and comment on his album, selling the album anywhere else would not earn enough.
• They would need to add a lot more value to the album like adding a live video of Benny singing and dancing and a virtually DJ mixed song.

They calculated the cost of making one CD:

• They had to pay a monthly rent of Rs 10,000 for the recording studio for one month but due to lack of funds the owner of studio allowed them to pay 50% after 4 months
• Printing the cover page of the CD- 5 Rupees
• Cost of empty CD – 15 Rupees
• Cover of the CD – 10 Rupees
• Other – Rs. 5000 per month

They did not think that they could do all the work themselves and hence employed 20 members of their class and promised to pay them 100 Rupees if they managed to sell 20 CD’s each per month. They worked under the sales department.

The album was launched in January and Sam decided to sell each CD for a cost of 99 Rupees. The first month the 3 of them sold only in their school and to their close friends and were able to sell 500 CD’s in cash while another 250 were sold in credit.

The next month the 3 of them decide to go outside school after taking customer feedback through questionnaires, interviews and observations and improving the mistakes they made in the album. Then they decided to market the CD throughout Mumbai and were promoted and sponsored by Planet M, as Planet M is a well known music shop; which charged 10000 per month for advertising. Every week on a Saturday, which is statistically Planet M’s day with the most footfalls, a special promotion took place where Benny sang live in the store. Planet M also advertised this in the Rolling Stones Magazine and newspaper.

Benny became an instant hit and at the end of the year they sold 1000 CD’s per month in cash and 500 CD’s in credit that was to be paid by the next month. Now Benny and his friends have decided to sell the rights of the album to Tips Industry limited for 500,000 so that they could sell whole over India. They took this step as there board exams were approaching but as per the contract Benny has to perform about 1 stage show per month all over India and gets 10,000 Rupees for doing so.