1. BRIEF/ TERMS OF REFERENCE

The story of His Master`s Voice (HMV), as a retail brand, began in July 1921. Sir Edward Elgar, British composer, opened the first HMV store at 363 Oxford Street. Nowadays, HMV is part of HMV group plc and is the UK& Ireland`s leading retailer offering a range of products from DVDs, CDs, Video games, books and technology products. The retailer is ultimately modern, has a long history and an experience in this flourishing industry. HMV has become an entertainment giant in the UK which operates around 200 modernized stores in key shopping locations, offering a selection of more than 150,000 music titles, collection of DVD and Games titles. (hmv, 2009) Additionally, it has an online store at www.hmv.com which enables customers to obtain information and buy online.

2. Market / competitor / consumer analysis

This section provides a market analysis, competitor analysis and consumer analysis for the region in which the HMV store is located. The selected HMV retail outlet is: HMV Leeds City Centre. The address of the store is: 1 Victoria Walk, Headrow Centre, Leeds, LS1 6JD.

2.1. Market Analysis

According to McGoldrick (2002), while conducting market analysis, the researcher needs to focus on the target area, the kind of visitors, stores available, market trends, etc. In this case, the area is identified as the Leeds City centre and specifically the area around Victoria Walk, Headrow Centre, Leeds.

Upmarket areas like the Leeds city centre can be expected to attract better placed customers. The city centre is the central business district of Leeds, as well as, the city has eight colleges and two universities with a total student population over 200,000. Generally, the city centre is a prime shopping centre with variety of shoppers including serious and window shoppers (Leeds Online, 2009). People who come to shop around the city centre includes; teens, students, young professionals, middle aged and elderly. Furthermore, people who live or work in Leeds are very inclined to come to the city centre because of supporting stores such as; reasonably priced restaurants, cinemas, bars, etc.

As it is known, customer needs and trends are changing along with frequently developing and renewing technology. In the past, individuals were going to theatres, live shows, open-air cinemas and concerts. However, trends have changed in time and various individuals nowadays, prefer watching DVDs or concerts while lying on their couch. Thus, demand for music CDs, DVDs and video games is increasing swiftly. During 2008/09, DVD market in the UK grew by 2 percent and is the leading product category of the retailer with being 45% of its sales. However, due to piracy and illegal downloading, sales of music albums/CDs have declined 3% but the retailer is still holding 85% of the total retail market. On the other hand, growth of technology products slowed in 2009 and represented 18% of total HMV group sales. Same as technology products, the UK book market has declined 2% in 2009. (hmvgroup,2009) As a result, 2009 was a very good year for HMV UK& Ireland with an operating profit of £53.7million (hmvgroup,2009).

2.2. Competitor Analysis

According to Gilbert (1999), competitor analysis for large firms requires careful consideration. Large organisations such as Tesco, Toyota, HMV, Borders, McDonalds, and others typically offer a range of multiple products. A competitor would be any firm that offers some or all of the products sold by the larger firm. Typically, smaller firms become niche players and offer some of the products that large firms sell but this activity still makes them as competitors. HMV is in the business of retailing products such as CDs, DVD of music and music, gaming CDs, Blue Ray discs, tickets to music shows, iPods and so on. Any firm that offers these products would essentially be a competitor to HMV. HMV at Leeds Central has competitors in two locations, one is in the Headrow Shopping Centre itself and the other location is outside the complex in the nearby areas. The nearby areas also have discount stores where CDs and DVDs are available at about 50% if the price sold at HMV centre. Additionally, users have access to the huge online shopping stores such as Amazon, eBay, iTunes, HMV online stores and so on. Some of the stores in the area that can be considered as competitors are (Kelkoo, 2009):

Crash Leeds at the Headrow Centre: This shop is located in the Headrow centre and offers a good range of music at lower discounts than that of HMV.

Debenhams: A large retail store offering a wide range of music and gaming CDs

Harvey Nichols: A premier high street store with a wide collection of music, gaming CDs, gaming devices, peripherals and others.

House of Fraser: Another excellent high street store that offers good music, knowledgeable staff and the store is particularly known for its classical music.

thehut.com& amazon.com: A very large online store for music, gaming CDs and devices, DVD, Blu-ray and other products sold by HMV. The rates are about 40-50% less than that offered by HMV.

Borders: Direct competitor, sells a wide range of music and movies CDs, books, eBooks and many other entertainment products. The store is located in the same complex and draws sufficient footfalls.

Game station: For gaming CDs, playing equipment such as PS2, Gamecube and PSP up to PS3, Xbox 360 and Nintendo Wii. The store is a niche product seller of games and gaming devices, gaming peripherals and a major competitor for HMV in the gaming section.

Comet: Merchandise and household items store along with CDs, games and other items sold by MV. Direct competition, low cost store with discount sales and draws the middle-aged customers and bargain seeking customers.

Virgin: This store offers a very large collection of all genres of music, downloads, books, mobile phones and accessories and many other products. This is a large competitor to HMV and located just a few streets from the Headrow Complex.

Argos: The firm has recently opened up and is a huge discount store, offering a wide range of DIY products, hardware items, video games, music and other products. Bargain and discount seekers would find this place very attractive

There are a number of other music stores such as Leeds Discount Warehouse Leeds; City Varieties Music Hall; another HMV store at Lands End;

2.3. Consumer Analysis

According to McGoldrick (2002), while carrying out a consumer analysis for a particular store, factors such as location and the economy of the place has to be investigated, this is especially true in the case of lifestyle items.

According to Leeds city council, there are more than 750,000 people living within the city as well as nearly 100,000 people come from different cities to work at the city centre. Moreover, thousands of tourists and shoppers at any age visit Leeds for shopping and entertainment. (Leeds.gov, 2009)

In 2009, total employment in Leeds is projected to be 443,600 and it is expected to grow 6%, creating additional 28,400 jobs till 2019. Despite the global economic crisis, the total unemployment in Leeds in 2009 is estimated to be 9.7% which is lower than some other big cities. (Leeds.gov, 2009) In 2008, average weekly earnings of low, middle and high class workers who are Leeds residents were, £122, £384 and £823.(Leeds.gov)

Retailers have to segment the markets in which they operate to be more specific in meeting frequently changing customer segment needs, however, for a retailer like HMV dividing the markets into segments by looking at individuals` music tastes, DVD and computer/console game selections will be very hard. Thus, generally, it can be argued that the retailer is trying to serve to the whole market. In order to serve to the whole market it is offering almost all of the Music, DVD, computer/console games and technology products that the entertainment industry is producing for each and every segment. For some customers, music albums and DVDs will be highly priced because the retailer is targeted at individuals who can pay premium prices for its products.

An important point as far as music is concerned, HMV has music dating back to the early 1950`s and classical music, therefore, it is holding the widest possible range of music CDs and albums. Since the retailer is offering more than 150,000 music titles, every music lover will find music albums or CDs that they will enjoy listening. Furthermore, the retailer is offering variety of categories and diversification of DVDs favourable for every film lover. Other than music and film lovers, it is serving to video game players which are 55 percent of the British population. (gamezine, 2009)

3. Retail Marketing Mix