I Tunes

 Apple iTunes could represent the future for the company,

transforming it from a computer maker to a global online retailer of
digital content.
 revenues from Apple iPods and iTunes account for over 40 per cent
of the company's revenues.
 The iPod offered people' 1000 songs in your pocket: This was a
brilliant, clear and succinct brand promise.
 Two years later, Apple launched its iTunes music store, creating a
digital download powerhouse. Much of the success has been down to
the simple and uniform pricing strategy, which has become an
industry standard: 99 cents a track..
 Through the success of the iPod, Apple enjoyed a reversal of fortune,
with the brand enjoying the benefits of the 'halo effect: Consumers
who were buying the sought-after iPods were now considering other
Apple products due to their positive experiences.
 In the fourth version of Apple iTunes, in April 2003, the firm launched
its online music store capability.
 The killer feature with the iTunes music store format was that a track
could be bought for as little as 99 cents-a revolutionary concept for
the recording industry.
 iTunes was compatible with Windows based PCs, too, rather than
just Apple computers, giving it a wider audience.
 Not only does the iTunes site cater for music lovers, Internet users
can also download audiobooks, TV series, movies, and audio and
video podcasts.
 Apple iTunes is now available in 22 different countries including most
of the EU, North America, Australia and Japan. All of the different
stores are adapted to take into account local music preferences and
tastes.
 Napster really kick-started the on line music revolution.
 The rise in digital music sales, which now account for over 20 per
cent of total record sales, has counteracted the continued decline in
sales in music discs. Downloading has now overtaken the singles
market.
 users can buy DRM-free songs for an additional 30 per cent extra.
The company now has three price points: 69 cents, 99 cents and
$1.29 cents for downloads. Music industry executives are alarmed
that iTunes has such dominant market share. They wanted a more
flexible pricing structure rather than the standard 99 cents a
download.
 The value of legal digital downloads has grown exponentially since
2004, from $.4 billion to $3.7 billion in 2008.
 The growth is expected to continue with increased broadband
Internet speeds; more digital music devices, including mobile phones,
integrated entertainment systems and more digital music download
providers.
 In partnership with several television studios, users could download
an entire episode of their favourite programme .
 Entire shows can be viewed for $1.99 an episode.
 The major issues to be overcome are piracy protection and pricing.
Movie studios want higher prices, control over release windows and
possibly, subscription charges.
 Probably the biggest area of concern for iTunes is
 the growing prominence of music player-enabled mobile phones.
Mobile phones have become ubiquitous, with 100 per cent
penetration rates in some markets. Much in the same way that they
took a portion of the digital camera market, they could also become
the dominant players in digital music, rather than stand-alone players
like the Apple iPod.
 More worrying for Apple is that, as technology improves, there will be
even greater integration between mobile phones and portable music
devices. It is envisaged that consumers will want only one handheld
device that will provide telephony, music and camera capabilities. In
response to this threat, Apple teamed up with Motorola to launch the
Rokr mobile phone, which allowed users to use iTunes to download
100 songs on to their phone.
 Other mobile phones have launched competing versions with much
larger capacities, holding up to 3000 songs.
 Apple iPhone has taken the market by storm, yielding further revenue
streams for the company through sales of digital content such as
games, applications and music through iTunes
 TheFinnish mobile telephone giant has launched its Comes with
Music' service, where mobile phone buyers candownload from a
huge catalogue of music for a year. Butthe real catch is that people
are allowed to keep their downloads after the subscription ends.
Nokia has built theprice of the music subscription into the price of the
Nokiahandsets, and charges for them at a premium. Thiswill prove
tough competition for Apple in that Nokia isa formidable adversary,
and this is an innovative business model in monetizing digital content.
For traditional music retailers, like HMV, the retailing landscape is
getting more and more competitive, with multiple channels of
distribution emerging due to the Internet and large supermarket
 chains now selling music CDs. due to their size and scale, they
canobtain large discounts from music publishers.
 now can buy albums from traditional Internet retailers such as
Amazon.com, and also on websites that utilize access to grey
markets, such as Case Study34 cdwow.com, and now through
legitimate download retailers. The music industry has truly evolved
into a multi-channel world.
 Increasing numbers of people are going to source their music through
the Internet and supermarkets, leaving traditional music retail
operations with a severe conundrum: how can they entice more
shoppers into their stores?
 The Internet may emerge as the primary channel of distribution for
music and other entertainment content, and these industries are
going to have to adapt to these changes.
 iTunes is the platform where all consumers' entertainment content
can be accessed through its site. Other competitors have different
ideas, and will continue to threaten the long-term sustainability of
iTunes, and its possible future success.

Levis
 The problem facing Levi Strauss was that jeans were increasingly regarded as 'uncool'.
 In 1999 closing 30 of its 51 factories and laying off about 15,000 people, or 40 h r cent of
its workers.
 In 1992 While competitors such as Cap, Diesel, Wrangler and Pepe stole market share
Levi's market share shrank frorp 31 to 14 per cent. The problem was complacency; for
years Levi's had been cool-the kind of cool that seems as if it will never end.
 In 1873 'as a utilitarian tool of daily life for farmers, ranchers, miners and factory workers.
In the 1950s and 1960s, however, they became associated with teenage rebellion and
counterculture.
 Mid-1980s that the company aggressively used televise advertising to launch its 5O1
Blues campaign. The engine room for this growth was one product: its 501 five-pocket
jean brand, which represented social acceptance and yet a kind of individuality and
rebelliousness among its wearers.
 One survey reported that proportion of US teenage males who considered Levi be a
'cool' brand plummeted from 21 per cent to 7 per between 1994 and 1998. This was
reflected in comment made by a 16-year-old male who comment hat his peen preferred
loose brands with non-tapered legs like the ultra-baggy JNCO jeans: 'But JNCO is more
last year. Now it's more Polo, Hilfiger and Boss.
 'If I buy Levi's, it's like I bought Wranglers and people think I'm cheap, but it's still
expensive!' Another IS-year-old female stated that her friends will not wear anything from
Levi's: 'It doesn't makes styles we want. Levi's styles are too tight and for the older
generation, like middle-aged people.' She prefers pants from JNCO and Kikwear. '
 One major competitor, Cap, began in 1969 ironically as a retail chain selling Levi's
exclusive\y. By responsive to consumer changes, the company saw, a rapid rise in
sales. Two others, Diesel and Pepe, have stolen rebellious attitude making Levi's jeans
less distinctive the minds of consumers.
 By 2000, traditional styles of jeans (Levi's heartland) had fallen to only 20 per cent of
sales, down from more than 50 per cent in 19%. To make matters worse, demographic
changes meant that the number of 15-25 years old in the population was forecast to fall
dramatically in future years.
