We all preach that

‘Every child is Different’

Then why bug them with the same

music?

Cartoon Network

launches a Music

Album*

* Exclusively for kids

Scooby’s Playlist

1. Scooby Doo2. Looney Toons3. Dexter’s

Laboratory4. Johnny Bravo5. Batman6. The Mask7. Tom & Jerry8. Powerpuff

girls9. Ed, Edd &

Eddy

• Kids’ entertainment industry in industry in India at an early growth stage

• Channels and movies being launched one after the other.

• Cartoon Network continues to grow but at a lower rate, because of the other channels launched

• In Hindi speaking market, Hungama TV has replaced Cartoon Network at the top spot

Product Life Cycle

Why India?

Why India? • Second Fastest Economy in the World• Regulatory Environment being

strengthened for fast growth of industry.

• Indian Consumers willing to spend more on entertainment.

• Growing middle Class with more disposable Income

• Huge Potential in Kids Segment (among top three nations with highest populations under 15 years of age)

• Lack of cohesive production and distribution infrastructure, especially in the case of music industry. Cartoon network can tap this with the its brand image and finances available.

SWOT & Porter’s Five Forces Analysis

• Well known and oldest brand• Focusing on creating characters

instead of only cartoons which enables them to leverage on it for other things like t-shirts

• Advent of region specific characters like Rama

• Seasonal fluctuations• Regional concentration is

driving away the urban consumers eg. 24 hr Hindi channel discourages parents to let children watch who wanted them to watch for improving

• languages.

• Increasing competition from other players like Disney ,Pogo

• Piracy, violation of intellectual property rights poses a major threat to the media and entertainment

• Building the brand further in the emerging markets and especially the rural internals

• Diversifying into new lines like theme parks

Strengths Weaknesses

ThreatsOpportunities

SWOT Analysis of Cartoon Network entering Indian Music Industry

Porter’s Five Forces AnalysisThreat of New Entrants (High)• Population under 25 comprising over 50% in the emerging

countries like India, China, scope for growth in the kids segment

• Initial investment is not very high• Disney Venturing in Indian movie Industry with Roadside

Romeo , to tap the huge potential of Entertainment market in India

Power of Suppliers (Low to Moderate)• Most of the characters are in-house creative insights• Dependence on intellectual capitalPower of Buyers (High)• Cartoon Network has the first mover advantage• But entry in this category is easy and highly sought after due

to the demographics

Porter’s Five Forces AnalysisThreat of Substitutes (LOW)• No music house is particularly making albums for kids on a

huge scale• Cartoon network with its reach to kids can penetrate easily

in Indian masses.Competitive Rivalry (LOW)• No particular music house in competition in this segment• In the music album market in general, following are the

competitors: BMG Music EMI owned ‘Virgin’ Universal Sony Saregama

STP Analysis

Segmentation & Targeting

• A differentiated strategy• Segmentation primarily on demographic

profiles• Segmentation on the basis of geographical

profiles too (a different album for different countries)

Target Segment• Children in the age group of 4 to 14 years• Urban, affluent, belonging to rich class

Evaluating Segment Attractiveness• A large part of the population in belongs to the 4-14 years

age group • Increasing number of movies for kids Substantial

• Reachable via television and all sources of mass mediaReachable• A lot of advertising campaigns use kids to increase

responsiveness• Increasing market for Sony PS and success of Kids’

products in IndiaResponsive

• The rich and the affluent class does not mind shelling out extra bucks

• People do not mind spending above a minimum level for gifts

Profitable• Kids of rich class families go to specific private schools,

buy specific stationary from select outlets, visit certain specific stores in malls.Identifiable

Positioning

• ‘Entertainment for children’• Inherent strengths and existing

connection with children• Pre - schoolers: lullabies, soothing music

and fun type of music• Children aged 4-14: teen artists albums,

dance music as well as educational songs

Marketing Mix

Current Scenario •Absolutely new market (88% of the people surveyed never or rarely considered buying a music album for kids)

•91% people feel there should be a music album catering to kids’ needs

•An average person is ready to pay Rs 150 for a CD coming from Cartoon Network

•87% of surveyed people consider gifting a music album to a kid as a possibility

•Only 13% people do not take their kids’ preference when buying something for them

•94% of the people will either definitely buy or consider buying a music album coming from Cartoon Network

PRODUCT• A compilation of popular toon

tracks & jingles from the house of Cartoon Network(61% of the surveyed people were interested in compilations)

• The first album can have ‘Tom & Jerry’ associated with it as the majority of people voted for it

PRICING• Premium pricing for cartoon character like Tom &

Jerry • Skimming strategy (initially)• Competitive pricing (on stagnation)• From market survey, price = Rs. 150 in India• Market penetration pricing (later)• Music album available through cartoon network

portal• Download price = Rs. 100 (since from survey, 88% buy

music from traditional stores and 12% buy online)• Selling online helps in collecting crucial consumer

insights through surveys • Higher prices for collections and special occasion

songs

PROMOTIONAL CAMPAIGN

• Radio airplay (primary source of promotion for any music album)

• Advertisements on Cartoon Network and its sister channels across the world using a brand ambassador

• Sales promotion to music record stores• Public relations and publicity consisting

of press conferences, kids-centered events at schools and nurseries

• Tying up with a major record making companies like EMI records so that the album can come under that brand to enable personal selling

• Direct marketing to customers at music stores by a Cartoon Network representative

Marketing Channel

Channel 1: Cartoon Network Merchandising Stores

Channel 2: Music record stores

Channel 3: Using the distribution network of a record label like EMI records

DESIGNING THE INTERNATIONAL DISTRIBUTION CHANNEL

• Cultural mores • Restrictive governments like in China• International music albums launched in a staggered

manner worldwide similar to movies• This means that the same album would be

launched on different days in different continents and maybe even in different countries (planning and scheduling)

• Measures must be taken to curb piracy especially over the Internet.

Profit Analysis

Profit Analysis

• Cartoon Network takes pride in presenting quality products to its consumers

• In this regard, Cartoon Network has decided to outsource the work of manufacturing of its music albums

• Music Industry in India is growing at CAGR of 4%

2008 2009 2010

Present market value of Music Industry = 7,500,000,000 7800000000 8112000000

Total share of children entertainment (8%) 600000000 624000000 648960000

CN is expecting a share of 15 % in one year. And grow to 20% in 2nd year and 25 % in 3rd year 90000000 124800000 162240000

Total Sales (Rs 150 / CD) 600000 832000 1081600

Manufacturing cost of a single CD (assuming T-series as manufacturer) Rs 35

Distributor Margin Rs 15

Cost of Distribution Rs 5

Total Cost Sales Rs 55

Margin per CD Rs 95

Profit per year (Before tax) without advertising costs 57000000 79040000 102752000

ALTERNATE STRATEGY

Kidzone (Children’s Magazine)

Kidzone (Children’s Magazine)