Music Pricing

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Music Pricing

1. Introduction

· Music pricing is one of the essential aspects of music that musicians need to pay close attention to. Surprisingly, budgeting is one of the biggest struggles that musicians face today. This is certainly caused by the idea that most people are not aware of the cost of various types of music.

· However, there are other musicians in the music industry who are desperate for fame and often sell their music cheaper than its predetermined value.

· Therefore, it is mandatory for musicians to adopt the right music-pricing strategy to avoid making poor decisions that would ultimately lead to financial loss.

· There are two main pricing strategies that can be of significance in music pricing. These strategies are Value-Based pricing and Competitive-Based pricing.

2. Body/Discussion

i. Competitive-Based Pricing Mechanism

· The Competitive-Based strategy allows one to position his or her product in reference to other products within the market. This strategy is expected to set a market price in comparison to other products that are being offered. The merchant may then use that product to establish an understanding of its best quality and or best value.

Advantages/ Pros

· Associated with low risks- the possibilities of product prices decreasing as a result of everyone within the market utilizing it.

· It complements other pricing models- this mechanism is used in conjunction to other pricing strategies

· Simplicity-it is simple to implement.

Disadvantages/ Cons

· Unsustainable in the long-term- it is quite unsustainable in the long term because it is effective for short term goals.

· Cannot be used independently- this strategy cannot be used alone.

ii. Value-Based Pricing

· Value-Based pricing strategy allows one to assign a certain price on a product as influenced by the customers perceived value of the product. This strategy focuses on the external factors of the target audience including their needs, desire, and willingness to purchase.

Advantages

· Easier to penetrate the market- this strategy makes it easier for marketers to penetrate the market especially when the products are packaged differently.

· Helps to develop high quality products- constant reviews from customers makes it easier to improve on areas that need modifications.

· Improves customer service- this strategy is primarily focused on the customers need and therefore it helps to improve on customer services.

· Increases brand value- this strategy voices to the public that the company using this strategy, places more value on their customers and thus improving the brand value.

Disadvantages

· Tampers with scalability- this strategy makes scalability difficult because it cannot be applied to larger audiences.

· It is quite unpredictable- this strategy is never predictable because the perceived value is never stable.

· It is time consuming- this strategy requires time to research and resources to put in place.

3. Conclusion and Recommendations

· To establish an effective music pricing plan, it is important to complement these two pricing mechanisms. It is advisable to use this mechanism together because they complement one another.

4. References

Dolgui, A., & Proth, J. M. (2010). Pricing strategies and models. Annual Reviews in Control, 34(1), 101-110.

Kienzler, M., & Kowalkowski, C. (2017). Pricing strategy: A review of 22 years of marketing research. Journal of Business Research, 78, 101-110.

Schindler, R. M., & Schindler, R. (2011). Pricing strategies: a marketing approach. Sage.