BSAD 685: Services Marketing
Lady Gaga, an artist that was finally getting a break and beginning to make a name for herself in this hectic, vicious shark tank Americans call the music industry, had a very tough decision to make for her upcoming tour. Her singles, visuals and social responsibility were major drivers to her building success and she was becoming very marketable as far as image goes. The public accepted her amazing voice, talented dancing, and loved how active she was in communities around the world. It attracted the idea to co-headline a tour with one of the most influential and pioneering sound and figure in urban music. The ...view middle of the document...
This brought chaos to the music industry and wrecked Kanye’s image to where he took a year hiatus and moved to Japan. This also put the management team of Lady Gaga into a predicament like no other. Lady gaga and her team were left with three options. They could go on with the tour as is (without West), scale the tour down, or cancel it.
If you were Troy Carter, which of the three touring options would you pursue for Lady Gaga?
If I were Troy Carter I would choose a modified version of option 1. I would headline the tour with Lady Gaga and depending on the region, be joined by musical guests. She already had a tour set in stone with a great entertainer who has proven to sell out arenas worldwide. With the addition of the release of her second album, numerous number one singles, three VMA awards, and a lot of attention, she was very marketable and her demand was at a high level (Lovelock, 273). The “Lady Gaga & Friends Tour” would tour the world and request the partnership of various artists in different regions. The entertainment industry, like any other industry, is catered to an audience which is also the customer base. People or fans listen to, follow, and idolize their favorite musicians, actors, athletes and show an enormous amount of customer loyalty (Lovelock, 60).
This would be a great opportunity to segment the market (Lovelock, 187) by region and allow other big names in the music industry to grow with Lady Gaga. A tour like this is uncommon and would bring a lot of publicity and following to the tour. True fans like to travel with their favorite artists to multiple shows and if you have the opportunity to see a few other performances with Lady Gaga, then that’s enticing. Financially, there could be a fixed, lower rate to pay these special guests, depending on their schedules and near future plans. Each guest would only do a handful of shows, so their traveling expenses and pay would be less, as well.
How much money does Lady Gaga stand to gain (or lose) under each option? In your view, do the potential rewards justify the investment? Can Carter do anything to mitigate the risks of pursuing a solo tour?
Option 1: Lady Gaga could gain or lose an enormous amount of money by considering the solo tour. The start of cost of $12 million to get the tour off the ground is substantial, but may be accommodated by merchandise, album sales, brand sponsoring, ticket sales, etc. The fixed costs of the modified Option 1 decrease by paying the guests a lower percentage that Kanye’s overall percentage would have totaled. Option 2: Forces Lady Gaga to downsize the tour and cover the tour alone with minimum-named openers. The fixed costs would decrease along with the risk of losing millions, but so does the credibility and potential to gain millions. She may be forced to conduct back-to-back shows and return to certain venues which would cannibalize certain market segments (Lovelock 114). She may have to restructure the venue lineup, as...