Marketing Strategy: Text and Cases - Case Study Example

Marketing Strategy, Text and Cases Case Summary Getty Images is a stock image agency in the United States that has been the market leader and exerted its monopoly in the stock image business. It has revolutionized the stock image industry but now facing tough competition from other businesses. The company is suspecting that its market position is in danger. Getty Images website is the most user-friendly and contains the richest content of images that are used by companies for branding. Getty therefore is considered as the Wal-Mart and the New-York Public Library both combined into one. The company was established in the year 1993 by two investment bankers named Mark Getty and Jonathan Klein. During the launch of the company, the stock image market was filled with small scale agencies, for stock photo and Getty Images bought all these agencies and digitized their image contents by positioning itself as the industry giant. The company almost owns 40% of the stock image market. Getty Images took over the company MediaVast as it was the owner of WireImage which is a party-picture agency. Though Getty Image was flourishing since the time of their launch, but is facing major problem due to its stagnancy and lack of adaptation to change. Getty Images is facing tough competition from the emerging competitive players in the market who are gaining market coverage by acquiring small agencies and implementing new technologies and business processes essential for the market growth in the present and future. Getty is facing attrition from its photographers and the stock buyers due to the company’s pricing and payment policies as it tends to absorb all the profits and leave very small margin for them. The dissatisfaction of its customers and employees were due to its licensing policies as these created strained relationship between them. Getty made sure that the images sold by its agents are tracked down as to where it would be used and interfered in the client’s decision. The company introduced policies on the exclusivity of the right protected images as due to these rights the photographers enjoyed profits from it. Therefore, less payment were made to the photographers as they did not get the privileges of the copyright protected images which was 50% as per industry standards but Getty pay much less. Being the market leader, photographers signed contracts with them at lesser payment as their volume of image exposure would be more and Getty took advantage of that. This was leading to their reputation loss and the company defended themselves by saying that they pay less as they need to survive in the competitive market where the introduction of digital technology in photography has made the stock photographer gain advantage of selling more volumes of stock images. Analysis From the market point of view, Getty’s present may be secured but it may face tough competition in future due to emerging micro-stock agencies like BigStockPhoto and Shutterstock. These agencies accept stock images from everyone and sell them for less than $1. The purpose of these companies is to enhance quantity of stock image which leads to increase in quality image as well. To overcome the emerging competition, Getty bought iStockphoto which was a pioneer in the industry. Industry cartels were formed by following flank marketing strategy by competitors like Corbis and Getty launching their micro-stock site so that business cannibalizing takes place within the same market rather than allowing emerging companies to operate and gain market share. Getty might also face challenge due to the introduction of companies who provide alternative venues for photography and even welcome varied project like web projects which require stock images that are not required for prints, low in resolution, free of cost, small image size and are not copyright protected. Since the customers for these projects have low requirements on the types of stocks, therefore, printable high resolution stock image market may face a slack period whose impact might be faced by Getty as it deals with expensive, high quality stock images. Also the introduction of video may lead buyer to switch their demand from still images. Certain critic described Getty’s collection to be biracial reflecting the American East Coast design culture which attempt to promote national corporations globally. This way the company has tried to evade homogeneity. There were times when market experienced a slack in innovation and collection, but Getty has always proved to be the champion. Therefore, it is acclaimed that Getty has enhanced the creative aspects of the collections and agencies they have acquired. Photographers or art buyers who are not getting suppressed to the dominant policies of Getty are finding out reasons and excuses for avoiding the company leading to loss of their customer base. They were resorting to self marketing of their pictures or looking for other channels of selling. This is giving leverage to websites like Digital Railroad founded by Evan Nisselson, which provides platform to agencies and photographers to self-publish their work. The website is fair in their pricing and content handling giving highest returns to their clients. They value volume of contents therefore allows everyone to publish through them and the best preferred images are voted on the top ranks. From the stock photographer’s point of view, the competition has also increased among them and there are so much of work and volume of images available that individual recognition has become a tough game in the pool of contents available. Therefore it has become very difficult to gain photo copyright licenses which would let them earn more as the options are vast and varied leading to tough competition. These market conditions are leading to stagnancy in income of the photographers. In order to be in the priority of the search engine optimization results in the Getty website, they need to increase the volume of content supplied to the company which is initiating to a decrease in the stock life of the images. Competition resulted in situations where photographers who earned $200,000 in the year 2005 by supplying their work through Getty but faced stagnancy in his income the next year even after doubling his collection, adding 400 new pictures at great price. The reduced pay has not only reduced their income but also has decreased their interest toward the job and many of them were quitting stock photography. Getty was also facing the impact of this attrition but as it was the market leader, the reputation was enabling them to earn profits as the company was all about volume and efficiency which led them to sell their collection at the best price. Major Areas of Concern Getty Images facing tough competition from other businesses. The company suspects that their current market position would be in danger. Getty Images was not coping up with the change in the business processes. Emerging companies gaining market coverage by introducing new technological innovation in their business processes. Getty was losing its customers due to its pricing and licensing policies. Micro-stock agencies like BigStockPhoto and Shutterstock were accepting stock images from everyone and were selling them for $1 or less. Demand for low resolution photos were increasing which were available at free of cost and were not copyright protected. Websites like Digital Railroad provided platform to agencies and photographers to self-publish their work at high returns. The market for still-photography was diminishing due to the advent of video imaging in the market. Stagnancy in the income of the photographers led to high attrition rate in Getty Images. Increase of self marketing and other channels of sales led Getty to lose out of business. Alternative Solutions Business Expansion Getty images should expand its business by channelizing its operations into different avenues in the industry. It should invest in micro-stock agencies that deals with all customers and offers stock images at lower selling price. The company should invest in web projects which requires pictures not having copyright protection, low in resolution and deals with small scale projects to gain greater customer base. The company may also introduce other mode of operations like video imaging as this is the latest area of importance in the market due to technological innovation and market change. It should also focus in licensing other territory of business like investing in the music industry for licensing independent commercial music for its clients (Wei, Samiee and Lee 49-70). Competitive pricing Getty Images should restructure its payment and pricing policies to fight completion and secure its market leader position. Due to its stringent copyright policies, stock buyers are facing difficulty in buying the images and using it for their purpose which is leading to a strained relationship between the company and the customers. The photographers are facing problem dealing with the company’s payment policies as Getty is not paying them according to the market standards and are misusing their power as well as dominance in the stock image market. Getty should give more importance in enhancing their customer and supplier satisfaction and increasing their experience in doing business with the company (Lusch, Robert and Stephen 20-40). Technological innovation The company should restructure its business processes as per the market change. They should be more open to technological innovation, digitization of their services and processes. Getty must adapt to change. They should renovate their company website, make it more customers friendly. It should introduce features like photographer of the month or best picture of the season and rank them to enhance their enthusiasm towards quality work. The photographers must be given more exposure to retain them in the company. It should introduce sharing feature through which customers could embed and share imagery for free of cost (Ferrell and Hartline 30-45). Product Development Getty should channelize to other product or service development like video licensing or invest in the music industry that deals with commercial audio licensed to clients for business purpose. Videos are taking over the market position of still-images therefore, investing into this territory might help them gain profit and market share, by enhancing their arena of operation (Morgan, 102-119). Business Model Restructuring The business model of Getty Images is entirely copy-right based. This business model led to lowering their customer base as they charged a high license amount for purchasing images. Companies operating at lower budget were not being able to avail their service leading to customer dissatisfaction. Therefore it should come up with strategies where they can create an archive of royalty free images for use through social networking sites like Twitter, Tumblr, Pinterest etc. these images would be embedded and could be only shared through these social networking sites. This would enhance their customer experience and increase its loyal consumer base. On the other hand, it would help Getty to regain its market position as it would reposition itself as a cost free stock image website. This strategy would help the company to promote itself through the social networking sites as well (Douglas and Craig 82-101). Implementation of the Strategy The best strategy that can be implemented for Getty’s market growth to gain competitive edge is the business model restructuring. The change in business model would help the company to gain a larger customer base. Companies who invest in low budget projects would be able to buy images from Getty. They would also have the right-managed archive for their premium clients and also the royalty free archive for non commercial use for clients who do not require high priority exclusive imageries. The embedded images would enable Getty to gain more customer preferences and judge their need by tracking who as well as from where the royal free images are being accesses. This would help them gain more client knowledge which would further help them to grow. On the other hand, photographers would get the advantage to market their work and offer bulk images at higher cost as there would not be the copyright protection charges and they would be able to promote themselves. Getty would gain strong long term relationship with its clients and its suppliers. Section B How did Getty Images become so dominant? Getty Images became so dominant because it was the market leader in the stock image industry and revolutionized the industry. It has the best designed website in the largest archive of images which were copy right protected and the authority of the license was solely of the company’s. The business catered to a vast operating base and was subjected to the regulatory and pre-merger antitrust investigations which are generally operated in large scales businesses in financial or airline industry. It constituted to 40% of the stock image industry and owned most of the small scale stock image agencies. Getty had become a universally alternative brand name for stock image search like Google. The brand name was not only for image search but also became an inspiration. It had the richest archive of stock images which are of the highest quality in the industry. It provided the best images which were strictly copy right protected to provide priority and sole ownership to its clients. What bargaining power issues does Getty Images have with photographers? The bargaining issues Getty Images was facing with its photographers are that due to the complex payment policies of the companies, the photographer was not being paid as per the standards of the industry. Photographers were paid less but still they stayed with the company due to its reputation and market reach. For high volume of pictures, lesser payments were made. The company dominated them and earned most of the profits. In order to suppress the bargaining power of the photographers, the company used tactics to pay lower amount to the photographers by relaxing its right- managed licensing policies. These policies allow photographers to earn high profits due to copy right ownership as it is transferred to the buyers. Therefore, it led to strained relationship between the company and the photographers. What challenges does Getty Images face? Getty Images was facing problem in adapting with the market changes. Moreover, due to its rigid licensing and payment policies, the company was facing high attrition of its clients and photographers. They were facing high competition due to lack of technological innovation and business expansion. Their market position was in danger. The market needs were changing leading to demand for low cost, low resolution images which are not copyright protected. To cater to these demands emerging small scale companies were gaining presence in the market which resulted in huge loss for companies like Getty who dealt with high quality, expensive, copyright protected images. Another problem faced by the company was the introduction of video imaging which was obsolescing still-photography market. Getty faced competition from companies who were providing platform for part time as well as independent photographers to self market and promote themselves. These companies came up with technological innovation and more upgraded business processes enabling them to gain competitive edge and helping them earn more market coverage as well as customer base. Table of Contents Marketing Strategy, Text and Cases 1 Case Summary 1 Analysis 2 Major Areas of Concern 3 Alternative Solutions 4 Business Expansion 4 Competitive pricing 5 Technological innovation 5 Product Development 5 Business Model Restructuring 6 Implementation of the Strategy 6 Section B 7 How did Getty Images become so dominant? 7 What bargaining power issues does Getty Images have with photographers? 7 What challenges does Getty Images face? 7 Table of Contents 9 Works Cited 10 Works Cited Douglas, Susan P. and C. Samuel Craig. "Convergence and divergence: Developing a semiglobal marketing strategy." Journal of International Marketing19.1 (2011): 82-101. Print. Ferrell, Odies C. and Michael Hartline. Marketing strategy, text and cases. Boston: Cengage Learning, 2012. Print. Lusch, Robert F.and Stephen L. Vargo. The service-dominant logic of marketing: Dialog, debate, and directions. UK: Routledge, 2014. Print. Morgan, Neil A. "Marketing and business performance." Journal of the Academy of Marketing Science 40.1 (2012): 102-119. Print. Wei, Yinghong Susan, Saeed Samiee, and Ruby P. Lee. “The influence of organic organizational cultures, market responsiveness, and product strategy on firm performance in an emerging market.” Journal of the Academy of Marketing Science 42.1 (2014): 49-70. Print. Read More