a) Depth of Product Line

EMI is one of the oldest record labels in the world with the history of one century. EMI represents repertoire in different languages, different genres and different countries. Being a subsidiary to this music group, EMI Malaysia has the advantage of products acquisition from other countries through the EMI companies’ internal licensing agreement. This guarantees the continuos flow of new products for the company’s operation.

            Besides the foreign products, EMI Malaysia has also developed a series of good original material from this country. This can be seen from the success of its artistes such as Ella, KRU and also its Malay compilation album “GEMPAQ”. EMI Malaysia’s own products are also enriched by the development in local movie soundtracks, poems and nasyid segment. The acquisition of products by EMI Special Marketing also enhance the depth of its products.

            Compared to other multinational company such as Polygram, Warner Music or Sony Music, EMI Malaysia undoubtedly has no competitive disadvantage in its products. Although there are some segments that are not covered by EMI Malaysia, such as the Japanese, which is manipulated by Sony Music, EMI Malaysia has introduced Indian products which is a new act in the local record industry.

            b) Strong Promotional Efforts

            From the discussion of last chapter, it is very clear that EMI Malaysia has put a lot of efforts in promoting its products. EMI Malaysia uses all channels that are accessible to get the maximum exposures for its products. Promotions are conducted systematically as developed from the promotion plan. Public relation is also performed well in order to run the promotions smoothly.

            It is also the strength for its promotion where EMI Malaysia is the first record company in Malaysia that holds its homepage in the Internet with sounds. After one year of the launching of its homepage, no other multinational record companies has taken similar steps. This shows that EMI Malaysia is sensitive to the marketing environments and keen on practicing new technology.

            Apart from that, continuous promotional efforts over the years have made EMI one of the most popular record companies in this country.

            c) Financial Strength

            As a subsidiary company of a multinational group, EMI Malaysia enjoys capital assistance since its establishment. After thirty years of operation, EMI Malaysia has grown into one of the biggest record companies in this country in terms of capital. Availability of capital helps EMI Malaysia in many marketing developments such as new artiste development, established artiste acquisition, new product experimentation, nationwide promotion campaigns and also purchase of other companies’ repertoire. More over, failure in developing one or two albums will not affect the company’s overall result. Compared to local companies, this is its most powerful strength.

4.2 Weaknesses

            a) Products Not Fully Exploited

            The richness of products of EMI Malaysia enables a broad coverage in many segments in the marketplace. However, overloads of new products at one time may lead to unfair treatments for some other items. Some potential items will not be well marketed due to over stretching on the “hot” items during that particular period. This is the common weakness of big record companies where they cannot put the full attention in every title. There might be a loss to the company if a potential item is being ignored.

            Apart from that, compared to other multinational company such as Sony Music and BMG, EMI Malaysia has less concern for its old products. Although EMI Malaysia still distributes its old products, there is no promotional support. It might be unknown to those consumers who like the old songs but do not know whether the old albums are still in the market. In contrast, Sony Music has come out with a series of recent years’ (one to five years) albums and sold at discount. All 20 albums in that series sold at RM10.90 for cassette tape and RM 29.90 for compact disc. These offers might be attractive to the consumers because they feature the popular stars’ previous albums such as Michel Jackson’s “Dangerous”, Mariah Carey’s “Music Box”.

            b) No Direct Online Communication

            Two years ago, advertising on the Internet was unheard of. Today, marketing executives are convinced that the Internet is the most exciting channel available. Putting its homepage in the Internet is a great start for EMI Malaysia to move into a new era of marketing. However, there is a significant weakness in the EMI Malaysia’ homepage where there are no direct communication between the consumers and the company. The homepage was edited and conducted by a third party, Beta Interactive Service. All feedback and mailing from consumers are collected by the Internet service-company before sending to EMI Malaysia’s office. This has caused a delay in information delivery where is not the what the Internet world should be.

            Instead of delegating its online work to the third party, EMI Malaysia should start its own online information unit. Comments or inquiries from consumers should be received in time and feedback should be sent out immediately. This may enhance the image of the company. Rock Records of Taiwan has its own computer programmers and technicians to work on its homepage. This allows its homepage to be updated daily with the latest information and becomes a popular website for Internet users.

4.3 Opportunities

            a) Internet Marketing

            As related to the previous discussion, EMI Malaysia should look seriously into the opportunities of Internet marketing. The Internet has evolved into a dynamic source of information as well as an extraordinary marketing tool that is able to reach any user. As of March 1996 there were over 40 million people on the Internet in 148 countries, and the Internet's growth is accelerating.

            There are several published studies about Internet demographics. A study published in the June 1996 issue of Internet Marketing & Technology Report showing the relationship between age and online buying tendencies:

            The chart shows that Internet users aged between eighteen to twenty nine is the group who has the strongest buying tendencies on the Internet. According to another report, commerce on the Internet can reach billions of dollars. In United States, Average revenue gained through the commerce in the Internet was estimated US$100,000 per month in 1994 and it grew to US $597,000 per month in 1995.

            For EMI Malaysia, it should optimize the opportunities of Internet technology as a direct marketing channel instead of just a promotion tool. The current Internet marketing conducted in collaboration with its agent M.O.G. seems not effective. Firstly, the catalog advertised with a total of 60 items is not broad enough. Secondly, it is not updated with latest album titles. Thirdly, the design of the homepage is not attractive and no further descriptions are attached. Finally, consumers are not convinced with the safety and effectiveness of their orders.

            Internet marketing will be the most competitive marketing tool in the next decade. It helps to increase the gross margin by eliminating the distribution intermediaries. It also applies to niche marketing powered by its economic electronic brochures. Besides that, Internet marketing also has the advantage where market tests can be conducted before investing huge amounts of money on product development. EMI Malaysia should improve all the current weaknesses in order to go a step further in the Internet direct marketing business.

            b) Potential Market Segment

            Although the popularity of classical music is insignificant in Malaysia, there are peoples appreciate and enjoy classical music. For years parents send their children for formal music education and register for the England Royal Music School’s examination. They are the group who the record companies should target for.

            Nowadays, classical albums offered at record stores are comparatively less than popular music. Retailers that specialize in classical are even rare. The most popular classical album in the local market is the series published by Orbis Publishing, London. Either a cassette or a compact disc, attached with a booklet, sold for only RM10.95 at most of the bookstores. Many classical music enthusiasts buy them in series for collection purpose. The series has reach to one hundred titles and is still in progress. Besides that, there are retailers importing classical albums from abroad and consumers buying classical albums from abroad through mail orders.

            The situation shows that there is a market for classical music. The current market is not well developed due to a lack of specialist for classical music in the marketing forces. Specialized knowledge is needed to promote classical music. EMI Malaysia should grab this opportunity by acquiring the products from “EMI Classic”, one of the most famous classical music labels owned by EMI group. The marketing should be handled by classical music specialists, and distribution may be done exclusively through EMI’s own label retail chain, which will be discussed later.

            c) New Distribution Channel – Brand Specialty Retail Chain

            Specialty retailing and franchise retailing are the new trends of consumer products marketing in this country. Most of the retailers at the shopping malls around Kuala Lumpur trade the products of famous brands. Selling products of only one brand under one specialty shop gives the images of exclusivity which improves the satisfaction of customers.

            After years of conventional distribution, many consumer products’ marketers start to open their own retail stores to sell their own brand’s products exclusively. For examples, for sports shoes, Reebok, Nike have come out with their own brand specialty retail stores in Lot 10, Starhill and One Utama Shopping Central, where formerly their products are sold at major department stores or by shoe specialty retailers such as The Athletes Word. As well as Memory Lane, brand specialty retail stores are set up to sell the Memory Lane’s cards. This is even more common in fashions such as the Levi’s, East India, Guess, Puma and Quicksilver. EMI Malaysia may absorb this retailing concept and set its very first EMI record chains in this country. The company may market its own label’s products, and possibly focus on the classical products besides popular songs, and target for those high market consumers and classical music enthusiasts. This will not only provide a new channel for direct marketing, it also helps to strengthen the company’s brand.

4.4 Threats

            a) Growth of Commercial Broadcasts

            The growth of commercial broadcasts may affect the sales of recording albums in the market. Both radio and television broadcasts are the substitutes of record albums because they play the same function as entertainment. Moreover, the subscription basis of commercial broadcasts shares the total entertainment budgets of the household income.
 

            Among all the commercial broadcasts, Astro gives the most competition in the home entertainment industry. This station by Measat Broadcast Network Systems Sdn Bhd offers a wide-range of multimedia broadcasting services to Malaysians and the region. It is equipped with the latest digital broadcasting technology and positioned strategically within the Multimedia Super Corridor.

            This station offers more than 20 television channels and 8 radio channels, broadcasts through the satellite in digital quality. The characteristic of its radio broadcasts is that every channel is tailored for different groups of audience. The contents are different according to different ranges of age and lifestyle. Out of the 8 channels, 4 channels have been on-aired up to date. It is predicted that all of the channels will fully operate in the beginning of 1998. All the radio channels run by Astro can also be received in FM wave radio, which means they are free to everybody who owns the normal radio. People who subscribe to this station are growing since the station is still new in his history.

            Apart from that, the growth of commercial broadcasts may also give impacts on the corporate customers. Some corporations such as supermarkets, restaurants, shops and offices who play music in their establishments may choose to play the radio rather than cassettes or compact discs. The quality and different choices of radio channels meet their demands.

            b) New Transmission Technologies

            It is predicted that recorded music industry will experience a revolution at the beginning of 21st century. The industry sees for itself is one less concerned with the actual manufacture of physical sound carriers and the shipment to retail sales point, but more with the distribution by transmissions (Flacks 1996). The developments of Internet and satellite in the information technologies are going to change the marketing of recorded music in future. This may lead to a turning point in the product life cycle for some sound carriers such as cassette tapes and compact discs. Some new techniques which is going to be practiced include:

             i) Interactive distribution of performances

            A decade ago, this notion was dubbed “The Celestial Jukebox”. It is a system in which music recordings are stored in database on the ground or in satellites, from where could be accessed by subscribers or other authorized users. It seems clear that if commercial music diffusion services can deliver performance opportunities to the public, covering a large range of musical tastes and a deep enough product lines, these sorts of services can substitute for actual physical ownership recordings.  The price structure of such a service can be attractive, particularly since the consumers could pay for actual consumption.

            ii) Multi-Channel diffusion services

            These types of services are already making slow inroads in Europe and even slower inroads in North America. The concept is straightforward enough: 30, 80 or ultimately 100 channels of commercially uninterrupted music organised by genre and available for reception to subscribers 24 hours a day. It has been estimated that a high capacity multi-channel system could programme the world’s entire repertoire of known recordings in less than 2 days.  Although less than a stellar commercial performer, the future of multi-channel music diffusion services could take off as a part of increased cable penetration and multi-service subscription packages.  Less costly than an interactive system, multi-channel diffusion can be effectively competitive with interactive services.

            iii) Electronic online distribution

            Whatever the potentials of interactive music system, the first impact of electronic networks and secure telecommunications systems will involve non-interactive subscription services and electronic delivery of copies of recordings. Internet will be a form of direct distribution, not only promotional tool, where practically the whole album can be downloaded. The computer and professional publishing industries already use information networks to distribute transient and permanent copies of their works to consumers.  It is expected the same for the record industry, although some serious technicalities such as legal hurdles have to be overcome.

            The traditional network of retailing could well be bypassed in the future.  Musicians or artistes could end up handling the distribution of their albums themselves. Album downloads through Internet are offered by some artistes, namely former Duran Duran member, John Taylor. Veteran producer Phill Ramone, who produced for Elton John and Celine Dion, certainly believes in the future of the Internet and the deep synergy between the Internet and the music industry (Cheah 1997).

            c) Unauthorized Copying

            Unauthorized copying in recorded music will continually threaten the record industry. The development of new technologies indirectly encourages the activities of piracy. The quality of pirated products is compatible with the originals where the digital technology allows hundred percents of sound quality transferring. Advancement in electronic delivery speeded up the delivery of master recordings from illegal sources. Consumers may be offered with the more attractive compilation album in good quality at the first time with economic price.

            The introduction of recordable compact disc player (CDR player) also gives opportunities to some parties to offer illegal high quality dubbing service for their customers. Those customers are satisfied with the service since they can compile all their favorite songs in one compact disc.

            Besides illegal products or services, unauthorized home taping also threaten the industry. Recorable and erasable digital technologies such as recordable compact disc (CDR) and minidisc (MD) allow consumers to make high quality home copies. Copying a song from satellite broadcasts and saving it in a digital disc will mean there is a nearly hundred percent quality sound copy, as well as downloading sound files from the Internet. With the popularized of Internet setting and CDR driver in the personal computer, it creates the better chances for home copying.

            To overcome the seriousness of unauthorized copying, the international industry organizations are working hard on it. The Recordings Industry Association of America (RIAA) has already made substantial progress in developing inaudible encoding techniques that can survive conversion between digital and analog format. In the United States, a legal framework, the Audio Home Recording Act, which permits the inclusion of coded information preventing second-generation copies, has already set a precedent.

            Any way, securing legal protection and enforcing it effectively are two very different issues, especially when the product can easily be nothing more tangible than a series of pulses downloaded electronically and stored on a computer disc.

            In Malaysia, there are efforts taken by the Records Industry of Malaysia (RIM) together with the Ministry of Domestic Trade and Consumer Affairs to minimize the piracy activities. Copyright Act 1987 (Act 322) is implemented to assure that intellectual properties are protected. To overcome the problem of unauthorized copying in general, the local record industry seems having a long way to achieve it.