TO: Executive Director
FROM: Managing Director of KGV
SUBJECT: Future strategy for KGV Europe
I. INTRODUCTION
This report help to formulate future plans for KGV’s bricks and clicks.
The main purpose of this report is to consider the following questions:
1. Should KGV keep some of their stores but sell at least 50% of their goods via internet?
2. Should KGV close all their stores and offer a total online services? If so: what risk would be involved? how would the costs of the business change? what organisational changes would the company have to make?
3. Should KGV stay as it, but: outsource advertising and promotion introduce new products. If so which one? consider targeting new segments of the market.
II. FINDINGS
1. Consumer’s preferences
The majority of consumer prefer buying concert tickets;
Sixty-five percent of customers under the age of 30 prefer to do their shopping via the Internet;
KGV’s customers would like stores to provide a wider product range; the various age groups have clear preferences as to the type of music they enjoy and purchase.
2. Tendency in purchasing
KGV’s customers would like stores to provide a wider product range;
Average spending per month in KGV’s medium-sized stores in highest among the 41-60 age group;
Spending on music products by the over 60 age group will increase significantly in the next ten years in Europe.
III. RECOMMENDATION
1. Recommendation concerning KGV’s stores:
It is recommended to leave high street shops and megastores;
Create special experience for customers (helpful customer staff; in-store music listening);
Carry out rebranding;
Redecorate the shops. Change the equipment, especially use more modern equipment to make it more pleasant for young people.
2. Products
Make shops more computer software oriented;
Introduce more CD’s stands for local customer;
Introduce book stands;
Expand the sales of computer games