Integrated Marketing Communications Plan

Product name:
Prepared by: Modified date: KKBOX Music Streaming Service Charles Du 03/20/2011

KKBOX Inc.

Table of Contents
1
1.1 1.2 1.3 1.4

Executive Overview........................................................................................................ 3 Scope of this Integrated Marketing Communications Plan.................................................... 3 Communications Objectives................................................................................................... 4 Communications Strategies.................................................................................................... 4 Issues and Challenges............................................................................................................. 4 Situational Analysis ........................................................................................................ 4 Product History....................................................................................................................... 4 Current Marketing Situation .................................................................................................. 5 Target Audiences ........................................................................................................... 5

2
2.1 2.2

3 4

Competition................................................................................................................... 6 4.1 Product Comparison............................................................................................................... 6 4.2 Competitor Differentiation..................................................................................................... 6 Branding and Messaging ................................................................................................ 7 5.1 Positioning Statement ............................................................................................................ 7 5.2 Value Propositions.................................................................................................................. 7 5.3 Major Messages ..................................................................................................................... 7 Communications Vehicles .............................................................................................. 7 Tactical Calendar............................................................................................................ 8 Budget ........................................................................................................................... 8 Metrics .......................................................................................................................... 9 Conclusion ..................................................................................................................... 9

6 7 8 9 10

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1 Executive Overview
KKBOX is the largest music subscription service in the greater China region, featuring over 1.5 million music tracks from major and local music labels and publishers. It is also the largest Chinese song database in the world. KKBOX offers unlimited music streaming and download service which is accessible from PC, MAC and various Smartphones. The service is available in Taiwan and Hong Kong where most of the popular pop-music stars and hit songs are produced and marketed. KKBOX initially launched in Taiwan, the music capital of global Chinese, during 2005 and quickly emerged as the most popular music service, acquired over 6 million registered users and 300,000 premium service subscribers. Given Taiwan s 13 million Internet population and high digital piracy traffic, KKBOX was a phenomenal success. With a single monthly subscription fee, subscribers can stream music online and cache songs on their PC and Smartphone for offline access. Unlike the popular business model used by iTunes, where users can download whichever song they want starting at $0.99 per song, KKBOX offers single monthly subscription fee of $5 per month, subscribers can stream music online and cache songs on their PC and Smartphone for offline access. KKBOX has been preparing to enter the US to take on music giant iTunes.

1.1 Scope of this Integrated Marketing Communications Plan

To bring the business model that has been successive and profitable in Asia to the United States. The business model is similar to Netflix unlimited movie streaming subscriptions, however, KKBOX subscribers can cache and store songs locally on the device for quick access when internet connection is not available. This plan will prepare KKBOX to enter the US by providing analysis vital to a successful launch.
Marketing Objectives

y y

Bring successful subscriber based business model for music listeners in the US. Offer alternative choice for listening to copyrighted songs without having to pay for each and every song.

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1.2 Communications Objectives

The objectives of this plan include: y y To succeed in become a popular music streaming service in the US To offer music listeners alternative choice than having to purchase and own each song

The objectives of this plan do not include: y y To eliminate the competition To decrease illegal download of copyrighted music

1.3 Communications Strategies

y y Market and promote aggressively to make consumers in the US aware of the service provided by KKBOX Inc Enter the US market with low monthly subscription price to entice new and future customers

1.4 Issues and Challenges

y Current business model used by Apple's iTunes has been the most used music service in the US, it will be tough to sway those users to switch to a subscription based service Potential royalty fee issues to label/record companies as well as artists The idea of paying but not owning the songs

y y

2 Situational Analysis
To enter a market that is dominated by Apple's iTunes music service can be hard as the iTunes has matured and have a set consumer base from the past 10 years.

2.1 Product History

Product background y The trend of Fixed-and-Mobile Internet Convergence is unstoppable. In the coming years, low cost Smartphone and Mobile Internet Devices, together with telecom carriers' aggressive 3G data plan will further popularize mobile Internet

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access. It will soon be a universal fact that each person is surrounded by multiple Internet connected devices for home and mobile access. Current problems facing product y Music piracy hurting not only the label/record companies but internet users who can easily download for free rather than paying a monthly subscription fee.

Customer trends y Customers who have internet access almost anywhere will be better suited with the stream services that KKBOX provides.

2.2 Current Marketing Situation

y y Entering s completely different geographic market and consumer behavior is bound to be different as well. Unknown factors will play a big role in this new market.

3 Target Audiences
The main audience would be consumers who are looking to pay a flat fee but have unlimited access to millions of songs anywhere there is internet connection. The secondary audiences would be the current iTunes users who are paying for each song starting at $0.99. For communications purposes there are two key audiences that we must understand and pursue. Our goal in pursuit varies by audience.

AUDIENCE
Internet Consumers who does not mind streaming where internet is available Current iTunes users who are paying per song

GOAL
Provide a flat subscription monthly fee and provide unlimited access to the library of songs

Sway iTunes users into using the subscription based services to save money and gain access to millions of songs with a flat fee

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4 Competition
Main competitors include Apple's iTunes and Amazon digital download.

4.1 Product Comparison

APPLE ITUNES
Key feature Price Target market Market share Strengths Weaknesses Marketing Strategy Library of songs Starting at $0.99 Internet Shopper Roughly 30% Affordable and easy to access Cannot be shared Easy access from iPhones and IPods Easy to share $0.99

AMAZON

Internet Shopper Roughly 8% Cheap and .mp3 format Library of songs Cheap and sharable

4.2 Competitor Differentiation

Apple's iTunes offers a wealth of digital music download selections and easy access from PC, Mac as well as its iPhones and iPods. Apple's iPhones and iPods also offers iTunes app that can transfer purchases directly to the users' libraries. In comparison, Amazon's selections can only be accessed from its website. Once downloaded, users will have to add manually to its digital MP3 devices. There is no easy integration like Apple's iTunes.

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5 Branding and Messaging

Branding would be essential to success in the US. US consumers often associates more with brand than product. For example, a satisfy customer of Apple's is more likely to purchase an Apple's future product than its competitors'.

5.1 Positioning Statement

y Positions the KKBOX brand among its competitors. Advertise and market directly against the competition to make awareness to the consumers.

5.2 Value Propositions

y Make the value of subscripting to KKBOX an priority statement on all promotion and marketing materials.

5.3 Major Messages

The main messages for the two target audiences need to be consistent across all marketing and promotion platforms. Any discrepancy needs to be eliminated before any marketing and promotional materials go live.

INTERNET SHOPPERS FOR MUSIC

Affordable monthly fees Access music anywhere there is internet connection Access music across multiple platforms

ITUNES USERS

6 Communications Vehicles
Utilizing all kinds of communication vehicles will be one of the important factors in successfully entering the new market. Communications between all departments across different platforms as well as to the consumers need to be clear and similar. Promotions cannot be stated differently between communication materials and vehicles.

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7 Tactical Calendar
Planning ahead will help in the long term success of building the brand as well as promoting the KKBOX service against the competitors. Each monthly goal needs to be laid out in advance in order to prepare each department in advance of what's to come. The tactical calendar will provide the necessary outlook in the next few months and set a clear goal to be accomplished.

COMMUNICATIONS VEHICLES TACTICAL CALENDAR

Vehicle Press Release Commercials Promotion Owner Media Advertising Marketing [Month 1] Prep Plan Plan [Month 2] Analysis Sample compare [Month 3] Print/Online Execution Execution [Month 4] Conventions Analysis Analysis

8 Budget
Budget will be an important factor in getting the brand recognized. Smart spending with the allocated budget will be crucial in the long run in getting the KKBOX brand and service started in the US.

COMMUNICATIONS VEHICLES BUDGET FOR

Vehicle Press Release Commercial Promotion Total $ [Month 1] $50k $100k $50k $200k [Month 2] $50k $200k $100k $350k [Month 3] $250k $1M $500k $1.75M [Month 4] $0 $1M $500k $1.5M [Month 5] $0 $800k $500k $1.3M

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9 Metrics
Performance metrics need to be created to monitor how each department is doing in communicating. This is done not only to the consumers but to each department as well to maintain the integration of the same message and goals . The challenges will be how clear and concise the messages are across all platforms.

10 Conclusion
This IMC plan is presented to make sure all marketing and promotional materials are uniformed and presented to the consumers with the exact same messages. It is imperative to have the same communications without any deterrence to ensure a smooth and successful market entry to the US. In order to stand against the current leading competitor, KKBOX must have its plan laid out ahead before the eventual execution of the plan is to be made. One miscommunication can make the difference between success and failure.

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CONFIDENTIAL | Integrated Marketing Communications Plan

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