Polyphonic HMI, Company Analysis

DECISION PROBLEMS
Polyphonic HMI is in the process of establishing their Hit Song Science technology in the music industry. Major issue is the choice of a target market that would make most effective use of limited $150,000 marketing budget. Following this decision, Polyphonic HMI also needs to determine its key marketing strategies such are pricing, positioning of the product for the target market in order to maximize the profits.

ANALYSIS OF INDUSTRY (based on Porter’s 5 Forces)
The music industry is highly competitive. The key players in the industry are the artists who write, compose, and perform the music; record companies who publish the music; and producers who help the artist select music
The market for HSS is estimated to be 20,800 unsigned artists; however, it is unlikely that these potential customers will repeatedly use HSS and access to commercial success is ultimately in the hands of the record label and producers. If compositions that artists are emotionally attached to score lower than 7, they may decide against using the software again as they may perceive the results to be an unfair indication of their recordings, which lowers Polyphonic profit potential. Negative word of mouth from unsatisfied consumer reviews could damage the product’s reputation. Worth to notice that not all artists are looking for mainstream success and therefore will not be attracted to the product, as their works are an artistic expression of themself's, so `hit `potential rated by software software may not be at all attractive.
Alternative 3: Target Producers (estimated potential market size of 10,000 albums/ year).
Pros: HSS is an assisting tool to developing hit records and singles. Opportunity to receive royalties from retail sales of successfully predicted singles/albums. Cons: Producers rely on experience, skill and gut feelings when producing music, so HSS may be viewed as an immediate threat to their trade. The market size of producers is also relatively small and would require significant market penetration in order