Innovative Price Promotion Strategies in the Music Industry Essay

1. Introduction

Once upon a clip, unrecorded public presentation was the lone manner people could bask music. On December 4, 1877, Thomas Edison invented the record player, which changed the manner the universe consumes music. Through the 1980s and 1990s, from Long Plays ( LPs ) to Cadmiums, record shops healthily grew with immense gross revenues and net incomes ( Shayo and Guthrie, 2003 ). After top outing in 1999, gross revenues in the music industry have declined by an mean 7 % per twelvemonth in the United States ( Connolly and Krueger, 2005 ). Harmonizing to the Recording Industry Association of America ( RIAA, 2009 ), music gross revenues declined from $ 13.7 billion in 1998 to $ 8.5 billion in 2008 ( Sinha, Machado, and Sellman, 2010 ). This raised the inquiry to many practicians and bookmans, what contributes to the autumn in overall grosss experienced by the music industry for the past decennary? ( IOS imperativeness, 2005 )

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1.1 Background

Market Transformation

Introduction of Internet engineerings have disruptively changed the traditional distribution channels and changed the manner clients live and store ( Keller, 2010 ), coercing the music industry to reconstruct its concern theoretical account in order to last. Today, the Internet has become a major beginning of music and picture content acquisitions and distributions. With the creative activity of digital formats of music files, high-velocity Internet connexions, broad use-diffusion of computing machines, and the outgrowth of peer-to-peer ( P2P ) file sharing webs, music storage and distribution have been made cheap and efficient without national boundaries ( Goel, Miesing, and Chandra, 2010 ). Consumers alteration in the sensed beginning of value of music traveling from touchable to intangible formats ( Burkart, 2008 ). In 1999, Napster was introduced, a big sum of digital music files were exchanged over P2P file-sharing webs illicitly, vocals that were protected by rational belongings rights were reproduced and transmitted without paying creative persons and music labels.

Ever since file-sharing webs became a menace to the music industry, they have been accounted for as the major ground of declined record gross revenues. While some surveies blame the reduced record gross revenues wholly on buccaneering, nevertheless, other researches attribute declined music gross revenues to a diminution in quality of new music, the outgrowth of new signifiers of amusement concerns, and indicate that free P2P file sharing webs serve as a tool for trying which finally increases music gross revenues ( Goel, Miesing, and Chandra, 2010 ).

Actions from the Music Industry

Despite the dissensions in the industry, while confronting the important alterations in the market environment, music industry reacted in a comparatively slow mode while engineering continued to progress in a high-velocity pace.A In the 1990s, the music industry perceived Internet as a menace and allocated most of its resources on combating and forestalling illegal file sharing or downloads ( Kunze and Mai, 2007 ). First, by adding encoding package, Digital Rights Management ( DRM ), to curtail duplicate of music files and to command the distribution and usage of digital music files. DRM took away the frights of music publishing houses to offer digital music files and offer clients a new manner to lawfully buy music and music services, such as Apple ‘s iTunes and Microsoft ‘s Zune Pass. However, DRM has the possible to enforce rigorous proficient controls on how clients consume digital music, which is lawfully purchased, restricting client ‘s ability to listen to music ( Lichtman, 2006 ).

In February 2007, Apple called for taking DRM protection from all legal digital music files and started selling DRM-free music in June 2007. One twelvemonth subsequently, Apple was followed by Rhapsody, Verizon, Yahoo Music, MTV and iLike, taking DRM wholly from catalogues. Finally in January 2009, Apple signed understandings with all the major music labels, and started to supply DRM-free music files on its iTunes online music shop, which was considered as a immense success ( Sinha, Machado, and Sellman, 2010 ). Second, by buttonholing for set uping and implementing stricter Torahs and by registering cases against P2P file sharing service suppliers, such as MP3.com and Napster, which were shut down in 2003.A However, many other file-sharing engineerings emerged, and made the manner to avoid duty for copyright violation, to call few, such as Grokster, KaZaA, Edonkey, FileNavigator, and Soulseek.

Unlike Napster or MP3.com, these service supplier companies do non utilize a cardinal waiter, and they merely provide the package that allows any user computing machine to go a cardinal waiter, so that these companies do non hold the control of their users ‘ actions and hence do non hold the answerability for copyright violation ( Shayo and Guthrie, 2005 ).A Third, by legal action against persons, since 2003, RIAA prosecuted more than 3,500 persons ( Wingfield and Smith, 2003 ). However, the move is hazardous, since the industry is actioning its ain terminal clients, and such legal action has besides been a public relation catastrophe, particularly when RIAA filed a case against a 12-year-old miss. Customers perceive that Cadmiums are excessively expensive and most of the money goes to the large labels alternatively of music creative persons.

Furthermore, they were able to copy vocals from wireless or from friend ‘s tapes in the yesteryear, why non now? Fourth, by public instruction runs, promoting legal usage of artistic work, increasing client ‘s perceived hazard, which plays a important function in consumer determination devising and behaviours ( Mitchell, 1999 ). However, a steadily increasing figure of consumers have already become accustomed to downloading music illicitly for free ( Walsh et al. 2003 ). Merely 5 % of Generation Y consumers perceived that downloading music illicitly was incorrect or unethical ( Freestone and Mitchell 2004 ). As a consequence, consumers view the attempt by the music industry as rigidness of its capableness and resistant to alter.

New Opportunities

The digital distribution channel enables new concern theoretical accounts that were antecedently impracticable ( Casadesus-Masanell and Hervas-Drane, 2010 ) : ( 1 ) Increase vocals ‘ searchability for single clients. ( 2 ) Greater assortment of music content, on-line channel allows retail merchants to hold big Numberss of vocals and different creative persons, particularly including new or basement recordings, which were non widely distributed earlier. ( 3 ) Low fixed cost. The cost of packaging and printing will be eliminated ; and the storage and transmittal cost will be minimal. ( 4 ) Music trying. Music as experient goods, which by and large is consumed before it is really purchased ( Lacher, 1989 ). The digital distribution channel allows music trying easier, cheaper, and more efficient, about anyplace and at any given time.A Gopal, Bhattacharjee, and Sanders ‘ ( 2006 ) research shows that take downing the cost of trying music will pull more consumers to buy music online as the entire cost of rating of content quality and acquisition lessenings. ( 5 ) Sharability. Digital formats of music files are capable for monolithic exchanges ( Sterne, 2006 ).

From the societal networking position, sharability adds value to pure ownership. The digital format of music files makes file exchange to peers a batch easier ; through sharing music files, making a new sense of value to personal ownership of the music ( McCourt, 2005 ).A With the advantages of the new distribution channel mentioned above, the music market has the possible to cut down content uncertainness, addition efficiencies, and travel from superstart-focus scheme to a broader base of gifted music creative persons to be successful ( Gopal, Bhattacharjee, and Sanders, 2006 ). For illustration, the Icelandic set, Sigur Ros, earned immense success and high popularity with the aid of P2P webs within the independent dad scene ( Casadesus-Masanell and Hervas-Drane, 2010 ) ; Arctic Monkeys entered the music market without any aid from the large labels, gained their popularity via Internet, and made the fastest-selling introduction album in British music history in 2006.

The Growth of Digital Music

Harmonizing to the RIAA 2006 year-end statistics study, gross revenues of Cadmiums have declined since 2001, while gross revenues of digital music have increased dramatically since 2004 ; digital individual vocals in the US market increased by 443 million and digital full albums gross revenues increased by 231 million from 2004 to 2006.A Apple iTunes, the current leader in the digital music market, expanded its consumer base from 861,000 in July 2003 to 4.9 million in March 2004 ( Borland and Fried, 2004 ) and hit 10 billion downloads in the terminal of January 2011.A Analysts project that more and more per centum of music gross revenues will switch from Cadmium to digital music. Forester Research predicts that whether in 10, 20 old ages, or even more, finally physical media will go obsolete.Therefore, the research design in this paper will be concentrating on on-line music scene.

Changes in the Market Structure and Value Chain

The traditional and digital music market construction and value concatenation are illustrated in Figure 1 and 2 severally ( Bockstedt, et Al. 2006, p.16 & A ; 19 ), in which the key participants in the distribution procedure and the chief value drivers in the value creative activity concatenation are outlined. In the traditional procedure, production and distribution of music is more complex and involves many participants, which leads to higher costs ; hence, the record labels possess more resources and have the most control powers in the value concatenation. On the other manus, digital music is easy reproduced, distributed, searched, stored and modified, which offer new chances to version music files for different pricing and trying schemes ; and to add value through service, selling, publicity, and licensing.

1.2 Purpose of the survey

As mentioned earlier, alterations in the market construction and the growing of digital format music files offer new chances for the industry to rethink its pricing strategies.A Therefore, this research would wish to analyze the effectivity of advanced monetary value publicities comparing to the traditional Temporary Price Reduction ( TPR ), while farther supplying information for future monetary value publicity development. However, under a specific type of monetary value publicity, different consumer sections might respond otherwise. By sing music as hedonistic merchandise, Moe and Fader ( 2001 ) show that several different consumer sections exist, while each section might hold different signifiers of merchandise acquisition behaviour and different responses to selling activities.

Therefore, this paper will further research the relationship between music type and a set of dependent variables, which are used to mensurate the effectivity of a monetary value publicity. Additionally, a recent survey by Sinha and Mandel ( 2008 ) finds that a consumer ‘s Optimal Stimulation Level ( OSL ) is one of the factors to act upon his or her inclination to pirate. Therefore, this paper would wish to compare the OSL between independent and mainstream music consumers, as a use cheque, and so analyze their responses to the selling activity, viz. the monetary value publicities.

Music Types: Mugwump and Mainstream Music Consumers

The cultural concept is frequently divided by the popular civilization and the subculture ; the former is thought as mainstream, which is frequently tied to corporate, and the latter is considered as independency from the commercial entities. Using the construct to the music industry, the types of music can so be divided into mainstream and independent music. Mainstream music, largely produced by the major labels, is familiar to the general populace and intensively promoted via mass media ; independent music, less known by the bulk, is either self-recorded or produced by independent labels and portion the value of freedom of creative activity.

Harmonizing to International Federation of the Phonographic Industry ( IFPI, 2005 ), 71.7 % of the retail music gross revenues worldwide went to the Big Four ( Universal Music Group, Sony Music Entertainment, Warner Music Group and EMI Group ). However, with the development of digital music, a recent survey ( Bhattacharjee, et al., 2007 ) indicates that the spread between independent and major music labels is acquiring smaller. Blackburn ( 2004 ) finds that file sharing has a strong negative impact on Cadmium gross revenues of popular creative persons, but a positive impact on unknown creative persons. Furthermore, from a consumer ‘s position, “music is less about an creative person ‘s self-expression than a consumer ‘s desire for self-reflection” ( Goldberg, 2005 ). In Western civilizations, uniqueness and individualism are desirable ( Kim and Drolet, 2003 ; Kim and Markus, 1999 ).

For illustration, Numberss of advertisement runs in manner industry highlight the construct of alone manner to show the ego ; Hugo Boss created a subdivision of Hugo Tracks under lifestyle eMag on its German official web site, utilizing independent music to diversify its consumer bases. Unlike mainstream music, ingestion of independent music can function as a manner to accomplish the intent of showing singularity. However, most of the researches were done in the field of mainstream music, non much of attending was put into independent music yet. Additionally, Apple ‘s iTunes shop, the current leader of digital music distributers, has signed trades with all the major music labels, and added more than 2,000 independent labels ; nevertheless, the figure of independent music records and creative persons is infinite ; hence, independent music industry is an interesting country worthy to be explored and will be the chief focal point of this academic research.

Positive Incentives

Most people would hold that so far neither the judicial proceeding nor public instruction run has efficaciously reduced illegal music downloads and well reduced the figure of users on file sharing webs. The music industry is in an experimental phase. Alternatively of standing in a defensive place like what the industry used to be, the music industry should take a proactive place when we all know that file sharing webs are here to remain. “The carrot is frequently more profitable than the stick” ( Lohmann, 2004, p.23 ). Therefore, it would be interesting to look into how positive inducements influence consumers ‘ behavioural purposes.

Monetary value Promotion Strategy

One watercourse of literature suggests that with the being of buccaneering, re-pricing the merchandise may be one of the schemes to pull out rents from the market ( Liebowitz, 1985 ). With important lessening in production and distribution costs, it offers new chances for the music industry to re-think its pricing scheme. Additionally, when utilizing online music services, most consumers compare monetary value foremost so other non-price elements ; hence, an on-line music service supplier differentiates itself from rivals through its pricing scheme. However, how precisely the legitimate music file should be priced is a really hard inquiry, but yet to be decently addressed. Due to clip and resource restraints, this paper will merely concentrate on the monetary value publicity scheme, but this writer believes that this will cast more penetrations into the pricing mechanism for the music industry. The undermentioned advanced monetary value publicity schemes are found in the music and comparatively similar industry ( e.g. news media, publication ) and will be used to compare with traditional TPR in this research, more inside informations will be described in the undermentioned chapter.

  • Advertising-supported monetary value publicity
  • Share it and acquire for free
  • Pay what you want

However, in my apprehension, no research has been done to look into the effectivity among these monetary value publicity schemes in the music industry. Therefore, this paper will analyze the impacts of music type and publicity type on the effectivity of a monetary value publicity in six different dimensions listed below, which offers more elaborate information for strategic selling development in the music industry.

  • Legal music file diffusion
  • Willingness To Pay ( WTP )
  • Purchase purpose
  • Customer return purpose
  • P2P download purpose
  • Positive word of oral cavity ( WOM )

This thesis will further analyze what other covariates might impact the effectivity of monetary value publicity schemes, and which of the undermentioned factors has a important prognostic ability.

  • Perceived Novelty
  • Perceived Control
  • Perceived Equitable Exchange
  • Monetary value of Legitimate Music

1.3 Problem statement

How can the music industry benefit from on-line distribution channels through advanced monetary value publicity schemes in the presence of music buccaneering?

In this survey, from bing literature in economic sciences, selling, consumer behaviour, distribution direction and psychological science, the research worker would wish to place the certain features among independent music consumers ; utilizing mainstream music consumer and TPR as mention classs to analyze the impacts of music type, publicity type, and their interaction consequence on the effectivity of different monetary value publicity schemes ; and look into the four covariates in measuring the effectivity of monetary value publicity schemes. This article is aimed at replying the undermentioned research inquiries:

  1. Do consumers who like independent music have a higher Optimum Stimulation Level ( OSL ) ?
  2. Whether music type, monetary value publicity type and their interaction consequence have a important impact on legal music file diffusion, Willingness to Pay ( WTP ), purchase purposes, client return purpose, positive Word of Mouth ( WOM ), and P2P download purpose?
  3. Whether the four covariates: perceived freshness, perceived control, perceived just exchange, and monetary value of legitimate music have a important impact on legal music file diffusion, Willingness to Pay ( WTP ), purchase purposes, client return purpose, positive Word of Mouth ( WOM ), and P2P download purpose?

By replying these inquiries to happen out whether there is a difference in OSL between independent and mainstream music consumers, mapping old research consequences of certain consumer features to a specific type of music. Understanding the factors act uponing the effectivity of the monetary value publicity in the music industry contributes to distribution channel direction and brings penetrations to develop pricing mechanisms that music labels, on-line distributers, and creative persons can prosecute. Furthermore, this survey might assist to set up new selling schemes and construct new concern theoretical accounts for the music industry to increase royalties, gross revenues, and net incomes. Ultimately, music labels and distributers can make new capablenesss of heightening each single consumer to bask music in a alone manner manner.

2. Theoretical Background

This chapter provides the elucidation of definitional issues, an overview of the constructs relevant to the thesis.

2.1 Optimum Stimulation Level ( OSL )

Introduced in the psychological science literature by Leuba ( 1955 ) and Hebb ( 1995 ), they propose that every populating single prefers a certain degree of stimulation, which serves as a motivational cause of his or her behaviour to set stimulation from the environing environment. When the stimulation from the external environment is below optimum, an person will try to increase stimulation ; when stimulation is above optimum, an person will try to cut down it. Harmonizing to the research by Berlyne ( 1960 ), most people tend to prefer stimulations, which are at the moderate level.A However, each person has his/her unambiguously determined optimum stimulation degree, and there are dependable differences among persons ( McReynolds, 1971 ). An overview of OSL literature can be found in the research by Rogers ( 1979 ). Raju ( 1980 ) through empirical observation examines the relationship between OSL, selected personality traits ( intolerance of ambiguity, rigidness and bigotry ), demographic variables, and consumer exploratory behaviours, and finds several important correlativities between OSL and the variables examined.

A survey by Steenkamp and Baumgarner ( 1992 ) examines the function of optimum stimulation degree in consumer exploratory behaviour, which consumers really engage in. They through empirical observation examine the relationship between OSL and consumers ‘ cognitive responses to an ad, ads repeat, information seeking, assortment seeking, chancing, hazard pickings, and advanced behaviour. The consequence shows that OSL is positively correlated to curiosity-motivated behaviours, assortment seeking and hazard pickings. In drumhead, OSL has been suggested as a map of basic personality traits and consumers ‘ exploratory inclinations. And a recent research by Sinha and Mandel ( 2008 ) finds that a consumer ‘s optimum stimulation degree is one of the factors to find his or her inclination to pirate.

2.1.1 Measurements of Optimal Stimulation Level

There are several self-reported steps developed to measure OSL.

  • The Arousal Seeking Tendency ( AST ) graduated table introduced by Mehrabian and Russell ( 1973 ; AST-I ), revised by Mehrabian in 1978 ( AST-II )
  • The Sensation Seeking Scale developed by Zuckerman ( 1979 )
  • The Change Seeker Index ( CSI ) of Garlington and Shimota ( 1964 )
  • The Novelty Experiencing Scale ( NES ) of Pearson ( 1970 )
  • The Stimulus Variation Seeking Scale of Penny and Reinehr ( 1966 )
  • The Similes Preference Inventory of Pearson and Maddi ( 1966 )

After reexamining the graduated tables mentioned above, Zuckerman ‘s Sensation Seeking Scale and Mehrabian ‘s Arousal Seeking Tendency Scale are most normally used to operationalize the OSL in consumer research. Figure 3 summarizes the surveies affecting empirical research of OSL in selling. In this thesis, the Arousal Tendency graduated table is selected for the operationalization of OSL, because of certain features and advantages it possesses. First, a assortment of factorial analysis shows that AST has high dependability and cogency. Second, it incorporates a broad scope of rousing seeking behaviours and arousal causes, which are relevant in the context of purchase and ingestion. Third, with 40 different statements scored on nine-point Likert graduated tables, AST has fewer points in comparing with other steps ; hence, it is easy to administrate.

2.1.2 Arousal Seeking Inclination

“An person ‘s penchant for an environment is closely related to his preferable arousal degree: Some individuals characteristically prefer unagitated scenes, whereas others actively seek to increase their rousing by choosing fresh, complex, or unpredictable situations.” ( Mehrabian and Russell, 1973, p.315 )

A figure of consumer researches show that consumer reactions to manner, music, and advertizements are influenced by consumers ‘ aesthetic or hedonistic penchants ( Sewall, 1978 ; Hirschman and Holbrook, 1982 ; Bell, Holbrook and Solomon, 1991 ). Individual ‘s aesthetic penchant is a map of rousing inclinations, which is determined by its corporate belongingss ( e.g. complexness, freshness and incongruousness ) ( Berlyne, 1968, 1970 ; Berlyne and Lawrence, 1964 ). Many researches have examined the relationship between rousing seeking inclination and consumer behaviours ( e.g. hazard pickings, assortment seeking, information hunt, and inclination to seek a new trade name or service ).

However, the relationship between consumers ‘ rousing seeking inclination and their reaction to selling stimulations needs farther research. In the survey of AST on consumer penchants for merchandise design, Cox ( 1994 ) reported that AST interacts with merchandise complexness, and besides calls for future research on the relationships between rousing seeking inclination, merchandise design features and consumer ‘s aesthetic penchant. Therefore, this paper is aimed at analyzing the relationship between music consumers ‘ AST and their reactions to monetary value publicities in the scene of on-line music shops.

2.2 Independent Music

As mentioned in the old chapter, independent music has non been richly addressed in the academic research. However, the Internet offers new chances for independent music to be discovered and distributed more widely than of all time. Additionally, ingestion of independent music can function as a manner to show singularity, which is normally pursued by persons in the Western civilizations. Therefore, the research worker hereby presents a brief debut of independent music, in comparing to mainstream music.

Independent music is a term used to depict independencies and liberty from major commercial labels.Within the development of music industry, independent music labels have a long history of advancing music. During the 1950s and 1960s, the major labels had most of the resources, made the most net income, and had the most control over production, fabrication, distribution, and publicity. While major labels dominated the market, independent labels struggled to last. From the late seventiess onwards, the figure of independent labels started to turn, which have gained higher popularity in recent old ages. However, the major recoding labels, which are now known as the “Big Four”, still accounted for about 70 % of the music gross revenues worldwide in 2005 ( IFPI, 2005 ). The differences between major and independent label are that independent labels typically offer higher royalty per centum to their creative persons, and tend to concentrate less on selling activities. Independent artists deriving their promotion and popularity largely rely on word of oral cavity to pull a distinguishable audience who normally disregard the commercial value of the music.

2.2.1 Independent Music Consumers

Independent music consumers prefer the music that is original and artistically created, which is the antonym of commercialised dad music. Independent music is used to depict the independency from major music labels. However, when devouring or buying music, consumers appreciate the music creative activity by the creative person and the music itself. The bulk of consumers does non pay attending or non even notices what record label produced the music. So how to specify “independent music consumer” ? One can anticipate that the most popular songs/albums/artists generate the highest gross revenues, most of the music gross revenues go to the major labels, and major labels continually increase promotions and popularities of their creative persons through intensive selling exposure. Therefore, in order to specify “Independent music consumer”, the hoarding Top 100 hits, which make up the biggest portion of all music gross revenues, will function as an indicant in this paper. Therefore, the term independent music consumer used in this paper is defined as follows:

Independent music consumers are persons who prefer to seek, devour, and buy the music that is NOT on the list of hoarding Top 100 hits.

On the other manus, Mainstream music consumers are persons who prefer to seek, consumer, and buy the music that is on the list of hoarding Top 100 hits.

2.2.2 Independent Music Consumer Characteristics

By the definition of independent music consumers mentioned earlier, the research worker farther discusses several features they possess as followers.

Curiosity-motivated Information Search

In general, there are two types of information hunt, acquisition of information to carry through the farther demand ( e.g. purchase of a trade name ) and information hunt to larn more about the environment based on wonder ( Steenkamp and Baumgartner, 1992 ). Music is an experient good. It is about impossible for consumers to foretell the content of the music, even from the same creative person who has been heard before. Music purchase is moderated by a consumer ‘s response to a vocal or performing artist ( Ouellet, 2007 ) ; hence, music purchase is frequently unplanned, particularly in the context of independent music since it is more or less unknown. Therefore, one can anticipate that seeking for independent music is more like the curiosity-motivated behaviour, as the desire for information for intrinsic grounds. Since independent music labels have fewer resources and tend to concentrate less on selling activities, independent creative persons are more hard to be discovered. With huge sums of music content available and most of it non advertised by entering labels, independent music consumers need to set more attempt to seek, happen and choose the music that entreaties to them.

Intolerance of Rigidity and Dogmatism

By this definition ( Rokeach, 1960 ), rigidness refers to the reluctance to seek new responses ; bigotry captures the grade of openness or reticence a individual reacts to new and unfamiliar merchandises, services, or thoughts. With the fact that independent music consists of a great sum of new vocals and creative persons, which are new and unfamiliar to consumers, independent music consumers who enjoy researching music among unknown music, one can presume that they have a higher grade of intolerance of rigidness and bigotry.

Advanced and Risk Taking Behavior

Innovativeness is defined as the grade to which an person ‘s early acceptance of an invention ( Midgley and Dowling, 1978 ). And an advanced behaviour can be modeled as an look of an person ‘s personality trait, innate innovativeness, which influences a individual ‘s pick in merchandise class ( Foxall and Bhate, 1991 ). Innate innovativeness is the inclination of a individual to do determinations independently, without being influenced by the communicated experience of others ( Midgley and Dowling, 1978 ). Independent music consumers, who normally disregard the commercial value of the music, select the music they like without the influences of mass media, or selling activities by the recording labels ; hence, one can presume that they have a higher grade of innate innovativeness, which leads to advanced behaviours. Furthermore, in the independent music industry, since many creative persons or vocals are unknown to the populace, there is a higher grade of music content uncertainness and ambiguity ; hence, there is higher hazard to lawfully buy or illicitly download vocals with unfavourable results.

Past research showed that OSL is positively related to curiosity-motivated information hunt, assortment seeking and hazard taking consumer behaviour ( Steenkamp and Baumgartner, 1992 ) ; rigidness is negatively correlated with risk-taking behaviour ( Kogan and Wallach, 1964 ; Schaninger, 1976 ) ; rigidness and bigotry are negatively related to innovativeness ( Robertson, 1971 ; Mikol, 1960 ; Coney, 1972 ; Jacoby, 1971 ) ; OSL is positively influencing hazard pickings and advanced behaviour ( Raju, 1980 ).

Therefore, based on the independent music consumer features discussed above, one can anticipate that there will be a difference in OSL between independent and mainstream music consumers, and they might hold different signifiers of music acquisition behaviour and responses to selling. This paper is interested to see whether the music type can hold a important impact on the effectivity of a monetary value publicity, comparing the responses to the monetary value publicity between independent and mainstream consumers.

2.3 Positive Incentive

Sinha and Mandel ( 2008 ) find that participants who have higher Optimum Stimulation Level ( OSL ) ( Leuba 1995 ; Raju 1980 ) diminish their WTP significantly when the perceived hazard increases.A For consumers within this section, neither the addition in sensed hazard of acquiring caught, nor the addition in magnitudes of the punishments decrease their leaning to buccaneering. On the other manus, positive inducements, such as handiness of rare recordings and easy payment method, can cut down their plagiarist inclination significantly, and 1s with higher OSL may be willing to pay more for a rare recording.

Leading schemes for on-line retail merchants in the presence of music sharing should include different pricing options, an efficient hunt engine, and new licensing constructions ( Bhattacharjee, et Al. 2006 ). Based on prospect theory ( Kahneman and Tversky, 1979 ), Nunes, Hsee, and Weber ( 2004 ) analyze how the consequence of cost construction act uponing consumers ‘ perceived foregone additions and losingss with failure to pay, and the consequence on consumer purchase purpose in the package industry. They find that merely pull stringsing the manner to administer the package can change consumers ‘ perceptual experiences of cost construction and injury associated with buccaneering.

They propose that to cut down rational belongings buccaneering by economical and psychological novel selling instead than farther legal action and stricter enforcement. The debates above motivate the writer to concentrate on positive inducements in this paper. Additionally, under the premise that independent music consumers have higher optimum stimulation degree, utilizing negative inducements can non efficaciously cut down their inclination to illicitly download music online. Therefore the paper is aimed at analyzing the effectivity of three advanced monetary value publicities comparing to traditional TPR and to look into whether publicity type has a important impact on the effectivity of a monetary value publicity.

2.4Innovative Price Promotions

Gross saless publicity is a really powerful selling tool. While advertisement is perceived as expensive and less effectual, communicating through publicities to make consumers at the topographic point and clip of purchase additions more attending in recent twelvemonth ( Gedenk, et Al. 2006 ). In the theoretical account presented by Watt ( 2000 ), he suggests legitimate manufacturers to cut down their monetary values when confronting copyright violation to squash out plagiarists from competitions instead than turning to legal right enforcement or to keep high prices.A To be effectual, utilizing different pricing schemes for different market sections is advised. Since different consumer sections might hold different inclinations to pirate ( Gopal and Sanders, 2000 ). The thesis is aimed at analyzing the effectivity of different advanced monetary value publicities in ( 1 ) increasing legal diffusion ( 2 ) increasing WTP ( 3 ) increasing purchase purpose ( 4 ) increasing client return purpose ( 5 ) diminishing P2P download purpose ( 6 ) increasing positive word of month and comparing between independent and mainstream music consumers.

2.4.1 Advertising-supported Price Promotion ( Watch the Ad and Get It for Free )

Harmonizing to McKinsey 2010 Quarterly study, advertising-supported concern theoretical account is one of the top 10 tech-enabled concern tendencies. An advertising-supported concern theoretical account is based on the multisided concern theoretical account, which creates value through information exchanges and interactions with multiple parties involved. In the media industry, advertisement is a authoritative illustration to set this concern theoretical account into pattern, such as newspaper, wireless, telecasting station, magazine, and late on-line societal networking web sites. With the development of Internet, this theoretical account is widespread in the digital universe ( Anderson, 2009 ). Advertising-supported theoretical account generates a important sum of its gross from advertizers, while supplying service to its consumers for free.

The implicit in premises are based on information exchange ( gather information from one group of consumers, and charge another group of consumers who requests to utilize the collected informations ) and cross-subsidization or monetary value favoritism ( offer free services supported by premium users who need for particular usage ). Based on web effects ( Conner and Rumelt, 1991 ; Takeyama, 1994 ; Shy and Tisse, 1999 ; Peitz, 2004 ), as more people utilizing the free online service, web effects can amplify the value of the service for all its consumers, such as facebook, which is considered as the most successful illustration in the modern history. In the context of music industry, YouTube, Google, Inc., which targets the mass market, is another illustration utilizing advertising-supported concern theoretical account, where users can watch and upload files for free.

Now YouTube has become a platform for many unknown creative persons to print their music to bring forth consciousness. The existent value of music does non lie in the merchandise itself, but instead consumers who listen to the music.

For the experiment of this paper, “Watch the Ad and acquire it for free” will stand for as the advertising-supported monetary value publicity, which indicates the if a individual chooses to watch an about 30-second advertizement, so he/she can download the music lawfully for free.

2.4.2 Share It and Get for Free ( Share the Link and Get it for Free )

“Fans do a better occupation than the record labels of doing music available to one another” ( Lohman, 2004, p.21 ). Juno Download is an on-line music site from Juno Records based in London, UK. During the Christmas vacation season in 2010, it came up with a publicity scheme, saying that if you post the nexus to other societal web web sites, such as facebook, chirrup, and myspace, you so can download the music file lawfully for free. During the panel treatment at the Future of Music Alliance Policy Summit in Washington D.C, many panellists point out that utilizing societal networking as a publicity channel is one of the most successful schemes, including giving off music for free ( Cohen 2010 ). The chief construct is to set the terminal consumers into the value creative activity procedure, ask foring consumers to actively take part in the distribution concatenation. This attack rewards consumers who portion the information with others and make web effects. Honoring your ain consumers provides an economic inducement for consumers to consumer, purchase, and distribute music lawfully ( Evanglista, 2002 ; Slater, et Al. 2005 ).

Economic actions become a portion of societal actions. Based on the societal public-service corporation theory, this attack enables consumers to show their gustatory sensations and expertness, and to construct societal links with others ( Huang, 2005 ; Hennig-Thurau, et Al. 2007 ). The value comes from communicating and sharing information, which creates a new sense of personal music aggregations ( McCourt, 2005 ). Additionally, since consumers know better about the music gustatory sensations of their friends, they can easy transform into effectual sellers ( Feng, et.al. 2009 ).

For independent creative persons, the more widely they reach the audiences, the more widely their creative activities are being heard, and it is more likely for them to hold financially honoring results. Addition in merchandise diffusions through legitimate channels to heighten the demand for complementary merchandises and services ( e.g. concert tickets ) ( Sinha, et Al. 2010 ) and to make halo effects ( promoted points have impacts on gross revenues of other products/categories ) created by publicity ; therefore, finally increase the creative persons ‘ grosss ( Liebowitz and Watt, 2006 ). Lohman ( 2004 ) besides points out that by giving consumers the freedom to print what they like, the more extended online music catalog will be available for everyone.

2.4.3Pay What You Want ( PWYW )

Pay what you want is one signifier of participative pricing mechanisms, others like auctions ( multiple purchasers compete with others to purchase the merchandise ) and Name Your Own Price ( NYOP ), which includes consumers into the price-setting procedure. The PWYW theoretical account enables consumers to hold the maximal control over the monetary value scene ; the purchasers can put the monetary value every bit much as they want and Sellerss can non reject them. There are two signifiers of the market in the exchange relationships: the monetary-market and the social-market ( Heyman and Ariely, 2004 ).A By leting purchasers to hold the concluding monetary value finding, PWYW transforms the exchange relationship from monetary-market to societal exchange norm, which influences consumers ‘ purchasing behaviours.

The most outstanding illustration applied this theoretical account in the music industry is the stone set Radiohead, let go ofing their album “In Rainbows” in 2007. For two months, they generated grosss of an mean $ 6 per album ( ComScore, 2007 ). PWYW is besides applied to other service industries, such as eating houses ( e.g. www.weinerei.com ) and touring services. This pricing theoretical account increases interactions between purchasers and Sellerss, and has increased its popularity late ; nevertheless, the literature is still limited. PWYW is characterized by the construct that single consumers have heterogenous rating of a merchandise and service ( Spann and Tellis, 2006 ). Under this pricing theoretical account, the marketer can function consumers who would non purchase the product/service at the first topographic point, due to monetary value concerns ( Bakos, 1998 ).

For illustration, the album “In Rainbow” was downloaded about two million times, one could presume that many of those were non sing purchasing the album in the first topographic point, but by PWYW the album was widely heard, and potentially attracted more new clients. Additionally, PWYW can mensurate consumers ‘ willingness to pay, which provides information to calculate future gross revenues ( Spann, Skiera, and Scharfers, 2004 ). However, refering the music industry, PWYW is merely applied by high-profile creative persons in my apprehension, the staying inquiry is the pertinence of this pricing theoretical account to the independent music kingdom.

2.5Factors act uponing the effectivity of the monetary value publicity

Consumers ‘ responses to different pricing schemes may non entirely rational but besides driven by other factors, such as perceptual experiences and penchants ( Kim, et Al. 2009 ).

Perceived Novelty

Harmonizing to the Social Cognitive Theory ( SCT ) ( Babdura 1986 ), there are different types of inducements, viz. fresh stimulations ; gratifying activity ; economic ; societal position ; and self-reactive inducement ( Larose and Kim, 2007 ). Consumers ‘ features interact with these stimulations that motivates consumers ‘ behaviours. Being unconventional and different from the usual manner to put the monetary value for a peculiar merchandise or service can be perceived as advanced ( Lucking-Reiley, 2000 ; Amaldoss and Jain, 2008 ; Chernev, 2003 ; Spann and Tellis, 2006 ). In the adoption-diffusion ( AD ) ( Mahajan, et Al. 1990 ) and the use-diffusion ( UD ) ( Shih and Venkatesh, 2004 ) paradigms examine the procedure of consumers ‘ acceptance of an invention, where personal factors are one of the determiners. Hirschman ( 1980 ) proposes the positive relationship between built-in freshness seeking and usage assortment ; Ram and Jung ( 1990 ) suggests innovativeness is positively related to usage assortment. Therefore, advanced consumers are being experimental and have higher inclination to seek different and new things.A A Under the premise that independent music consumers have higher OSL, they have higher inclination to seek for advanced and unusual stimuli.A

Perceived Control

Reactance theory ( Brehm, 1966 ) examines people ‘s reactions to the state of affairs when their freedoms are threatened, restricted, or prohibited ( Lessne and Venkatesan 1989 ; Thomas, Donnel, and Buboltz, 2001 ). Advanced monetary value publicities allow consumers with higher grade control over the concluding dealing, which cut down reactance among consumers, and develop positive attitudes toward the industry. Furthermore, based on the construct of societal signifier of emancipation, Giesler and Pohlmann ( 2003 ) suggest “consumer emancipation as a strong belief to difference, a difference which is being cultivated through societal communication” ( p.94 ). Independent music consumers attempt to keep outside from the mainstream as a subculture community ( Schouten and McAlexander, 1995 ), and have inclinations to stand against major labels, music corporations, and commodifications.

This type of consumers might desire to get away from the limitation of the music market, particularly entering labels ‘ control over music creative activities and music experiences ( Firat and Dhalokia 1998 ). Jenkins ( 1992 ) finds the oppositional relationship between fan nine and the amusement industry. Additionally, Ringberg, Odekerken-Schroder, and Christensen ( 2007 ) through empirical observation identify three different civilization theoretical accounts ( relational, oppositional, and useful ), which influence consumers ‘ penchants and outlooks to a service recovery. They find that consumers with the oppositional cultural theoretical account, to guarantee a successful service recovery is to supply consumers recovery options to do they experience in control. Consumers with the oppositional civilization theoretical account believe that market has more control powers, with the possibility to work vulnerable consumers. They prefer to hold controls instead to be at the understanding from the service supplier.

However, selling literature sing how consumers maintain control is limited. Sing the features of independent music consumers, one can reason that this section is more likely to hold an oppositional attitude toward the music industry. Advanced monetary value publicities enable consumers to hold some grades of control over the monetary value of the dealing. Chandran and Morwitz ( 2005 ) find that addition the grades of purchasers ‘ perceived control leads to an addition in consumers ‘ purchase purpose.

Perceived Equitable Exchange

Harmonizing to the equity theory, fairness plays as a function to act upon how an single allocate his/her resources ( Carrell and Dittrich 1978 ), the perceptual experience of relationships with his/her spouses ( Guerrero, et Al. 2007 ). Persons prefer to hold a balance of equity with his/her relational spouses ( Roth, 1995 ). Whether the exchange relationship is just or unjust is based on an person ‘s rating of the inputs and results comparing to other options available. Several researches provide empirical groundss that equity and reciprocality strongly motivate human behaviours ( Andreoni and Miller, 2002 ; Bolton and Ockenfels, 2000 ; Fehr and Schmidt, 2003 ). The rating of an exchange relationship could be based on the public-service corporations given by the legal channel in comparing to other options ( Rochelandet and Le Guel, 2005 ; Hennig-Thurau, et Al. 2007 ). In the context of on-line music, Kwong and Lee ( 2002 ) ; Plowman and Goode ( 2009 ) find that perceived just exchange relationships between downloaders ( illicitly ) and right of first publication proprietors significantly influence downloaders ‘ behavioural purposes. In drumhead, persons attempt to keep an just exchange relationship ( Glass and Wood, 1996 ).

Monetary value of Legitimate Music

Extensive surveies find that monetary value is the cardinal factor to act upon consumers ‘ purchase purposes and dispositions to download music illicitly ( Gopal et al. 2002 ; Molteni and Ordanini 2003 ; Chiang and Assane 2002 ). Feng et Al. ( 2009 ) suggest that the music industry is better to bear down lower monetary values, which can take to higher legal merchandise diffusions ; Plowman and Goode ( 2009 ) find that the monetary value of legitimate music positively influences consumers ‘ purpose to pirate, and the consequence is important for non-downloaders and for both heavy and light downloaders. Low monetary values motivate consumers to buy counterfeited Cadmiums ; zero-payment motivates consumer to illicitly download digital music files despite the low quality ( Ang et al. 2001 ). Monetary value is besides a common deterrence in the package and gesture images industry under the force per unit area of buccaneering.

Innovation monetary value publicities discussed before in this chapter are characterized by ( 1 ) the possibility of zero payment, ( 2 ) which is unconventional to usual impermanent monetary value decreases ; ( 3 ) higher grades of control by the consumer, which lead to a more ( 4 ) just exchange relationship in comparing with impermanent monetary value decreases normally used in the music industry. Additionally, with the being of independent and mainstream music consumer sections, each section might hold different responses to the monetary value publicity. Therefore, this research is interested of analyzing whether music type, monetary value publicity type, their interaction consequence, and the four factors have important impact on legal music file diffusion, Willingness to Pay ( WTP ), purchase purposes, client return purpose, positive Word of Mouth ( WOM ), and P2P download purpose.

3. Methodology

Due to clip and resource restraints, experiment can be considered as the most appropriate method for this maestro thesis. An on-line questionnaire is created to roll up informations needed. The points complied in the questionnaire are created for each concept, and the points are created from bing graduated tables, adding extra points, or modifying the bing graduated tables to suit the intent of the survey.

3.1 Instrument Development

The questionnaire consists of six subdivisions. In subdivision 1, the involvement of this paper is to analyze whether independent music consumer have higher optimum stimulation degree ; hence, in this subdivision a filter inquiry is developed to split respondents into two groups: independent music consumer and mainstream music consumer. Section 2 utilizations Arousal Seeking Tendency ( AST ) graduated table to mensurate music consumers ‘ optimum stimulation degree. Section 3 randomly nowadayss one of the four scenarios of different monetary value publicities, utilizing Impermanent Price Reduction ( TPR ) as control group. Section 4 measures the grade of legal music file diffusion, respondent ‘s WTP, purchase purpose, client return purpose, inclination to download from other P2P file-sharing webs, and positive word of oral cavity to asses the effectivity of different monetary value publicities. Section 5 examines the explain power of four covariates on the effectivity of monetary value publicity. At last, subdivision 6 gathers respondent ‘s demographic information, and his/her past experiences in music purchase and download. The complete questionnaire can be found in the Appendix A.

3.1.1 Filter Question: Music Type

Music type as one of the of import elements for this thesis, in order to garner information from independent and mainstream music consumer sections, the questionnaire starts with the filter inquiry to test the respondents and divide them into two groups. As defined in the old chapter, independent music consumers are persons who prefer to seek, consumer, and buy the music is non on the list of hoarding Top 100 hits. Therefore, to divide the sample, respondents will be shown a list of top 10 singles ( including the vocal rubric and the name of the creative person ), and be asked their penchants sing the listed music.A Due to the fact that most respondents are unwilling to set a batch of attempt to make full out the questionnaire, it is impossible to show the full list of hoarding top 100. To minimise the attempt required, merely top 10 singles from the hoarding top 100 hits will be presented.

To find respondent ‘s music penchant, the filter inquiry is developed based on the graduated tables designed by Costley and Brucks ( 1992 ). The original graduated table is a three-item graduated table, which is used to mensurate a consumer ‘s trade name penchant. The analyses of the graduated table reported its dependability with alphas value runing from.90 to.97 ( Costley 1993 ). Since in the eyes of consumers, an creative person can be viewed as a trade name ; the application of this graduated table is deemed appropriate. In order to increase the response rate and to maintain the questionnaire every bit simple as possible, respondents will merely be asked sing their attitudes toward the top 10 singles. To divide the sample by merely inquiring respondent ‘s attitude in music penchant, “In general, do you like the music listed above? ”

3.1.2 Arousal Seeking Inclination

As mentioned in the old chapter, rousing seeking inclination graduated table will be used to mensurate independent and mainstream music consumer ‘s optimum stimulation level.A The 40-item version is developed by Mehrabian and Russel ( 1974 ), and reported a Kuder-Richardson dependability coefficient of.87. And a revised version with 32-item was developed by Mehrabian in 1978 ; nevertheless, due to copyright issue, research worker can merely obtain the 40-item version utilizing 9-point response graduated table to carry on the experiment for this thesis. In this paper, the Cronbach alpha coefficient is.87, indicating really good internal consistence dependability for the AST graduated table used with the sample.

Dependability Statisticss

Cronbach ‘s Alpha Cronbach ‘s Alpha Based on Standardized Items N of Items
,866 ,875 40

Table 1: The Reliability of AST Scale

3.1.3 Development of Price Promotion Scenarios

Four monetary value publicity scenarios are created to stand for four different monetary value publicities: Watch the Ad and Get It for Free ( Ad ) ; Share the Link and Get It for Free ( Share ) ; Pay What You Want ( PWYW ) ; and Temporary Price Reduction ( TPR ), utilizing TPR as control group. Researches find that the design and layout of the website affect consumer purchase purpose ( Vijayasarathy 2004 ; Richard 2005 ). The intent of this thesis is to measure the impact of music type, publicity type, and their interaction consequence on the effectivity of different monetary value publicities ; hence, to govern out website designs as a factor act uponing consumer purchase purpose ; verbal descriptions are deemed most appropriate. Other functionalities, such as the extensity of merchandise catalogues, easy payment methods, and a hunt engine can positively act upon consumer online purchase purpose ( Poddar et al. 2009 ; Hausman and Siekpe 2009 ; Liang and Lai 2002 ; Sinha and Mandel 2008 ).

Therefore, in all four scenarios would supply the indistinguishable information sing website functionalities: iBeatz is an on-line music shop, which provides ( 1 ) extended independent music catalogues offer by independent labels and creative persons ; ( 2 ) free sampling services ; ( 3 ) a recommendation engine based on purchase/sampling/viewing history ; ( 4 ) high quality of digital music ; ( 5 ) gig/concert information and ticket service ; ( 6 ) fast downloading clip ; ( 7 ) easy payment methods ; ( 8 ) high information security ; ( 9 ) easy pilotage of the web site.

After sing the current online music shops, Amazon MP3, Beatport, Grooveshark, imeem, iTunes, Jamendo, Juno Download, Kroogi, last.fm, MagnaTune, Musicload, A Napster, Pandora, Rhapsody, Spotify, the original monetary value of a individual on iTune is somewhat lower, commonly sets at the monetary value $ 0.99/ $ 1.29 ; while for other independent music shops, the original monetary value is normally between 1.20a‚¬/1.50a‚¬/2.50a‚¬. For the music files on gross revenues, the common price reduction monetary value on iTune is $ 0.99/ $ 0.69 and for other on-line music shops, normally set at the monetary value 0.99a‚¬. After sing the information aggregation procedure, geographic constituents of the respondents, and the treatment with the professor in the university, researcher decides to utilize euro currency for the monetary value scene in the scenarios.

For “Watch the Ad and Get It for Free” and “Share the Link and Get It for Free” monetary value publicities, respondents can take to download the music lawfully for free by first watching a 30-second commercial or portion the nexus on the societal web website merely one time, severally. Otherwise, they can besides buy the music at the price reduction monetary value 0.99a‚¬. For PWYW, if a individual decides to download the music on iBeatz, he/she can pay every bit much as he/she wants. For TPR, the original monetary value of the vocal was 1.20a‚¬, and the current price reduction monetary value is 0.99a‚¬ ; respondents will merely be asked, “Would you purchase the vocal on iBeatz? ” The item description of each scenario can be found in the Appendix A.

3.1.4 Dependent Variables: Effectiveness of the Price Promotion

An effectual monetary value publicity should be able to ( 1 ) addition legal music file diffusion ( 2 ) increase consumer ‘s Willingness To Pay ( WTP ) ( 3 ) addition consumer purchase purpose ( 4 ) addition client return purpose ( 5 ) lessening P2P download purpose and ( 6 ) generate positive Word of Mouth ( WOM ). After showing the scenario of the monetary value publicity, which is the use of the experiment, respondents will be asked several inquiries to measure the effectivity of the monetary value publicity.

( 1 ) To analyze the procedure of legal music file diffusion, respondents will be asked, “Would you lawfully download the vocal on iBeatz? ” ( 2 ) Directly or indirectly measure consumer willingness to pay. For TPR, by inquiring respondents “Would you buy the vocal on iBeatz? ” If the reply is yes, his/her willingness to pay will be 0.99a‚¬ ; if the reply is no, so his/her willingness to pay is zero. Similar methods are used for Ad and Share. First by inquiring respondents “Would you lawfully download the vocal on iBeatz? ” if the reply is no, so his/her WTP is zero. If the reply is yes, so further inquire answering “If you decide to lawfully download the vocal from iBeatz, you will watch the ad/ portion the nexus to acquire the music for free or you will buy the vocal at the price reduction monetary value 0.99 ; if he/she chooses to lawfully download music for free, so his/her WTP is besides nothing.

For PWYW, straight ask the respondent to province how much he/she is willing to pay. ( 3 ) To mensurate purchase purpose of each monetary value publicity, by merely inquiring respondents their likelinesss to utilize iBeatz to lawfully download the music. ( 4 ) Since one of the major ends for most of the houses, both offline and online, is to guarantee consumer return ( Pine, et Al. 1995 ; Reicheld and Sasser 1990 ), in accessing the effectivity of monetary value publicity it is of import to mensurate client purpose to return. Therefore, respondents are asked to bespeak their likelinesss to revisit iBeatz in the following 3 months. ( 5 ) To mensurate respondent ‘s inclination to pirate, by inquiring respondents to bespeak their likelinesss to download the vocal from other web sites, such as P2P file sharing webs that might non be legal. ( 6 ) Finally, it is to mensurate the positive word of oral cavity.

The general understanding is that WOM can be a important factor act uponing a house ‘s gross revenues, growings, and selling returns. A great trade of groundss shows that WOM can hold a important impact on consumer merchandise pick ( Danaher and Rust 1996 ; Wangenheim and Bayon 2004 ). Many concern directors have widely adopted the Net Promoter after it was introduced in 2003 Harvard Business Review. The widespread acceptance of Net Promoter lies in its simple concept. Respondents merely rate their likelinesss to urge a company to others. Based on this concept, step the positive WOM by merely inquiring respondent “How likely are you to urge iBeatz to a friend, household member, or co-worker? ”

3.1.5 Four Covariates

Perceived Control

Perceived control is measured utilizing a three-item, seven-point Likert graduated table accommodating from Bateson and Hui ( 1992 ), mensurating the grade of control a individual feel in a peculiar scene which might act upon the result. Consequences of their research confirm the importance of perceived control on the delectaion of the service experience and the consumers ‘ responses to the service supplier. And they report an alpha of.61 for the dependability of the graduated table. Since on-line music shop can be seen as the service supplier, it is suited to utilize this scale.A The perceived control concept ( Ajzen, 1985 ) includes a self-efficacy point ( i.e. points refering the trouble to make the manner he/she desires ) and controllability points ( i.e points sing people ‘s feeling that things are under their control or they feel that they are able to act upon the result through their behaviours ).

Perceived Novelty

Adapt from a three-item, nine-point graduated table, which is used in mensurating the sensed freshness of a specific advertizement exposure. The graduated table is developed by Cox and Cox ( 1998 ) after reexamining the relevant literature, and reported the dependability with an alpha of.77 by the writers. By inquiring respondents to bespeak the fittingness of the words ( Unusual/Original/New ) depicting the monetary value publicity they experienced. In this paper, the respondents are exposed to one specific monetary value publicity scenario, and to my reading, advertisement is portion of the promotional portion of the selling mix ; hence, utilizing this graduated table is considered appropriate.

Perceived Equitable Exchange

Oliver and Swan ( 1989 ) develop a three-item, seven-point statement to mensurate the grade a individual perceived “advantageous inequity” ( p.25 ) from an exchange with the other party with a LISREL estimation of.78 in its dependability. Adapting from their graduated table, this research is to mensurate the grade to which a respondent ‘s sensed equity that he/she gets from an exchange relationship with iBeatz, by inquiring respondent ‘s grade of understanding or dissension of either iBeatz or he/she gets more out of the sale under a specific monetary value publicity.

Monetary value of Legitimate Music

With different concluding dealing monetary values possible in different scenarios, utilizing the graduated table developed by Petroshius and Monroe ( 1987 ) to mensurate the sensed value offered by a peculiar merchandise for a peculiar monetary value. For the two merchandises examined in their research, an alpha of.87 and.92 are reported for the dependability of the graduated table. For the intent of this thesis, monetary value of legitimate music is to mensurate the sensed value offered by a peculiar monetary value publicity for a peculiar music file, for illustration, by inquiring respondents: sing the vocal under the monetary value publicity is really good/poor value for the money ; really economical/uneconomical ; really expensive/inexpensive, etc.

3.1.6 Other Variables

Besides the forecaster variables listed supra, there are other of import factors might besides act upon the effectivity of a monetary value publicity. Kwax, Fox, and Zinkhan ( 2002 ) find the positive relationship between Internet use, merchandise information, and the possibility of on-line purchase. One can foster deduce that online music purchase requests some grades of experiences. And in general, consumers ‘ purchase behaviours are, at least to some grade, based on their past purchase experiences.

A survey into music ingestion behaviours in Germany, the writers investigate music downloader ‘ motives and their inclinations to assorted commercial theoretical accounts ( Walsh et al. 2003 ). The consequences show that the degree of experiences a individual has in music downloading straight and significantly affects his/her music ingestion beh

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