University of Luton Luton Business School Department of Business & Marketing
The Phenomenon of Music Piracy in Greece: A Marketing perspective Theodoros Kondominas
A dissertation submitted to the Luton Business School, University of Luton, in partial fulfilment of the requirements for the degree of Masters in Science in Marketing Management
Key words: music piracy, marketing, consumer behaviour, intellectual property, Greek music market
Abstract: In this study the phenomenon of music piracy in Greece is discussed. An empirical study is carried out using primary and secondary research. The issue of music piracy is linked with consumer behaviour. The primary research examines expert views as well as consumer attitudes. The intent is to produce marketing recommendations for record labels to adopt to reduce piracy levels.
Acknowledgements: I would like to thank the University of Luton for the help they provided throughout the entire project. Next I would like to thank my supervisor Mr. Neville Hunt for providing accurate advice and systematic guidance, supporting me with valuable knowledge through years of experience. Furthermore, I would like to thank HRH (Hellenic Research House) and more specifically Mr. Kostas Laretzakis, for the help and resources they provided throughout the research program. Working with them has been a gainful experience and I hope that I will work with them in the future. Finally I would like to thank my parents for their moral and financial support as it would have been impossible to get this far without their help. Furthermore my friends: Christos Tsintikidis, Alkis Manoussis, Panos Tsigris, John Vidalis, Dimitris Zounis Kostas Baltas, Alex Maounis, Kimonas Rigas, and Ina Kovacec as well as many more that helped me morally and practically throughout the completion of the project. This work has been dedicated to all the people mentioned above. A big thank you is in place.
Table of Contents:
2.0 Back Ground Information
2.1 Music Piracy â€œThe Global Phenomenonâ€?
2.2 The IFPI movement
2.3 Music piracy in Greece
3.0 Literature Review
3.1 Psychographic Variables
3.2 Product-Attribute variables
3.3 Demographic variables
3.4 Perceived harm/benefits to singers, music industry, and society
3.5 Social influences
3.6 Personality influences
4.1 In-Depth Interviews
4.2 Focus group Interviews
4.3 Quantitative Research (Questionnaires)
5.1 In-Depth Interviews
5.2 Focus Group Interviews
5.3 Questionnaires (Quantitative Research)
7.1 Suggestions for further research
A Few final Words
List of Appendices: Appendix 1: About Copyright Appendix 2: Domestic music piracy levels in 2003 Appendix 3: Journal Article 1 Appendix 4: Journal Article 2 Appendix 5: Depth Interview Cover Letter Appendix 6: Depth Interview Discussion Guide Appendix 7: Focus Group Discussion Guide Appendix 8: Questionnaire Appendix 9: Depth Interview Discussion notes
Chapter 1: Introduction This thesis is concerned with the topic of music piracy in Greece. The piracy phenomenon in Greece has reached immense levels and there is definite need to put a stop to all the illegal activity that is taking place. The purpose of this thesis is to examine the issue from the consumers’ point of view, mainly through consumer behaviour. The research taking place will examine aspects of consumer behaviour that are related to the issue of piracy as well as the views of professionals that are related to the music industry. After all the research has been carried out, suggestions will be made in the form of a marketing plan to be adopted by any Greek record label firm. Initially there will be a review of the current situation in the world and then a more detailed explanation of the situation in Greece will follow. Once the background information on the topic has been completed the research conducted on the topic will be demonstrated. At first in the “Literature Review” secondary research on the topic of consumer behaviour concerning the issue of piracy will take place. Through the secondary research, areas of interest will form and will be examined in detail through primary research. The “Methodology” will fully describe in detail the primary research that was conducted. The research program was conducted over three phases and examined professional opinions as well as consumers’ attitudes on the issue. Upon completion of the primary research, the reader will be able to examine all the findings and results uncovered in each of the three phases of the research. The conclusions from the findings and the recommendations are the final remarks of the thesis. In the conclusions, the key aspects from the findings and the areas of interest that seem significant are discussed. Moreover the recommendations are the authors’ suggestions towards record labels in terms of reducing the outcry of music piracy in Greece.
Chapter 2: Back Ground Information It is crucial, for the reader to understand the importance of the problem of music piracy in today’s society. It is worth mentioning that it is related to a great extend with aspects of intellectual property and also related with severe magnitude of financial crime. Before beginning to read the analyses of this report it is important to give you a glimpse of facts and habits supported with information about music piracy around the globe with special focus on the current situation in Greece. It is recognised by many that the phenomenon of piracy has reached immense levels and that something needs to be done in order to salvage the music industry and the artists’ reputation. It is argued that music piracy hurts the industry not only in terms of monetary value but also affects the quality of the music product it self. It is important to note that across Europe but also in most developed countries of the world, a specific legislation prevents any act against intellectual property and specifically counterfeit musical products distribution or production. Appendix 1 contains the formal rules and regulations that apply in the protection of copyrights.
2.1 Music Piracy “The Global Phenomenon” Commercial piracy of physical formats once again plagued the recording industry in 2003, accounting for an estimated US $4.5 billion in illegal sales worldwide. It is thought that illegal music trade is feeding the profits of international organised crime syndicates who are involved in drugs, money-laundering and other criminal activities. It is costing governments hundreds of millions of pounds in tax revenues. It discourages companies activating in intellectual property related businesses from investing in
countries they fear are not adequately protecting their intellectual property rights. It is also destroying; and indeed in large parts of the world has destroyed, local music cultures, local record companies and the careers of local musicians. This is particularly true in the developing world where, because of the failure to enforce intellectual property rights, countries that once bred international stars now find it hard to develop successful artists even at a local level. Commercial piracy, contrary to what commentators mistakenly think, is just as important a problem for the music industry as Internet piracy. In several of the music industryâ€™s very largest markets - countries with low rates of broadband Internet penetration such as Brazil, Mexico and Russia; piracy of physical discs still counterbalances its internet equivalent. The global pirate market for recorded music totalled 1.7 billion units in 2003. Disc piracy increased by 45 million units, a rise of 3% on 2002. The pirate cassette market fell by almost 25% as pirate discs continued to replace cassettes. An estimated 35% of music CDs sold in 2003 was pirate products. When cassettes are included, piracy accounts for 40% of all music products sold worldwide. With declining cassette sales, over two-thirds of pirate product sold is now on disc â€“ either an illegal factory pressed disc or a CD-R copied from an original for commercial sale. The format of pirate music products varies in different regions. Pressed discs continue to dominate the pirate disc market in Asia and Russia, but CD-R accounts for the vast majority of pirate product in Latin America, North America and Europe. The rapid spread of CD-R piracy over the past four years has created new problems for the music industry. The duplication speed of CD-R burners has increased steadily over this period and has only now begun to reach a maximum level. CD burning machines can now burn a 74-minute disc in approximately three minutes. A table of the domestic piracy levels around the world can be found in Appendix 2 showing countries with the highest levels to those with the least.
The value of the pirate market for recorded music was an estimated US $4.5 billion in 2003, meaning that pirate sales now account for a record 15% of the legitimate music market, up from 11% in 1999. The pirate sales value in 2003 was down slightly on 2002 due to falling prices of originals. The global pirate music market is bigger than any individual national legitimate music market except for the USA and Japan. Piracy levels increased in many Western European countries in the last years, but Spain, Italy and Greece stand out as the worst hit by CD-R piracy. Countries with historically low piracy levels, such as Belgium, Denmark, Germany, Sweden and the UK, also reported significant increases. In the Czech Republic, piracy rose to almost 50%, driven by the growth in CD-R piracy. In Poland, pirate sales continue to thrive. Latvia, Lithuania and Estonia are key transit territories for pirate goods into Eastern and Western Europe, and also have piracy levels of over 60%. Russia and Ukraine are huge pirate markets. In both countries, the demand for CD-R disks hugely outweighs legitimate demand. Both countries are key exporters of pirate goods. Russia is the second largest pirate market in the world and worth more than US $240 million. Piracy levels in Ukraine decreased slightly in 2001, but domestic piracy is still around 80%. Political disinterest, combined with a lack of effective enforcement for intellectual property rights, continues to result in high piracy levels in the Africa region and the Middle East. In many countries the cassette still remains the most popular pirate music carrier. However, CD-R piracy is growing fast. The Asia-Pacific region maintains its position as the worldâ€™s leading producer of pressed optical discs, feeding illegal music markets around the world. It is no surprise that three of IFPIâ€™s top ten priority territories are in Asia, when the region hosts nearly 50% of the worldâ€™s optical disc plants. Physical piracy continues to predominate in most countries in the region, particularly where Internet penetration has yet to reach significant proportions2.
The continued decline in the legitimate market is the direct result of high levels of piracy in most markets in Latin America, resulting in a 14% decrease in value and a 10% drop in units during 2003. Last year all markets in the region sold 148 million legitimate units, compared to 243 million units in 1998 – representing a drop in legitimate sales of 39%. The trend towards recorded CD-R’s as the favoured pirate format continues, with 98% of all seized infringing products on CD-R’s. In 2003, over 150 million blank CDR’s entered Paraguay alone from markets in South East Asia. CD-R burning laboratories controlled by organised crime groups are able to operate with relative impunity in territories such as Brazil and Mexico, where weak legislation and ineffective policing mean there is little real threat of detection and subsequent prosecution.
2.2 The IFPI movement During the last years an international organisation has been set up in order to tackle the increasing problem of music piracy. Some background of the scope, the structure and the aim of the organisation is given below IFPI represents the recording industry worldwide with over 1450 members in 75 countries and affiliated industry associations in 48 countries. IFPI’s international Secretariat is based in London and is linked to regional offices in Brussels, Hong Kong, Miami
IFPI's mission & key priorities •
Fighting music piracy
Promoting fair market access and adequate copyright laws
Helping develop the legal conditions and the technologies for the recording industry to prosper in the digital era
Promoting the value of music in the development of economies, as well as in social and cultural life
Who can be a member of IFPI? Any company, firm or person producing sound recordings or music videos, which are made available to the public in reasonable quantities, is eligible for membership of IFPI. What are IFPI's main activities, internationally and regionally? IFPI Secretariat in London is responsible for co-ordinating international strategies in the key areas of the organisation's work and mainly the - anti-piracy enforcement, as well as the representation in international organisations, legal strategies, legal action and public relations. It is also the recording industry's most authoritative source of market research and information, providing a comprehensive range of global industry statistics. IFPI's regional offices for Asia, the CIS countries, Europe and Latin America are responsible for implementing IFPI's strategies at regional level, co-ordinating the work of national groups and setting lobbying priorities tailored to the political environment in their regions. IFPI's office in Brussels is the recording industry's representation to the European Union. It interacts directly with the EU institutions and co-ordinates the industry's lobbying network in Europe. IFPI's Regional Office for Asia is located in Hong Kong, with additional offices in China and Singapore. It co-ordinates the region's lobbying activities and legal strategies. IFPI's Moscow office is responsible for co-ordination and policy in Russia and the CIS countries. IFPI Latin America, formerly FLAPF, has an executive office in Miami and co-ordinates the region's lobbying, anti-piracy and communication
2.3 Music piracy in Greece It is evident from the description of the global phenomenon of piracy that Greece is amongst the leading countries of music piracy sales and distribution in the world and one of the top in the European Union. Having been witness to this problem, the situation inside the country is completely shocking. It has a negative effect on the Greek economy in terms of monetary loss but also in terms of job losses in the music industry and the relevant sectors. The music industry is responsible for many job opportunities in the market. Some of the areas of work include: song/music writers, singers, artists, production studios, record labels, record stores, CD production factories, journalists, radio producers, DJâ€™s, advertising companies etc. In total the music industry accounts for over 10000 job positions in Greece. All the
(The sales person approaches the people and offers the latest updated collection)
initiatives made by IFPI for the protection of music products, benefits record labels that are part of IFPI as well as all the related music field industries. Records have shown that Greek recording labels have been forced to reduce their staff even by 50% in the last decade Other than the parties directly involved with the piracy phenomenon, the forging of intellectual property has a negative impact on the Greek economy with a loss on income from revenues and taxes. However consumers are not aware that they are the ones that make up the Greek economy, and that the revenues that the government looses with the purchase of counterfeit products need to be made up. As a result they end up paying the lost income through end of year taxes in order for the government to cover the gap that is created in the economy.
Due to a lack of high speed Internet in the country, piracy mainly comes in the form of CD-R’s. However as more people are introduced to the Internet, the rate of users that download illegal music online is expected to increase in the near future. The main distribution of pirate music products is conducted by “economic immigrants” that sell their products on the streets. Access to pirate products by consumers is a very easy task as these economic immigrants have managed to spread right through the entire nation and are managing to find consumers willing to purchase pirate products at all times in most popular locations. A very typical scenario of how consumers have access to these products can be witnessed every day. Whilst sitting down for coffee it is inevitable that consumers will be approached by the vendors and will be exposed to large range of pirate music to fit all tastes. The low price of these products is fairly appealing to the buyer but furthermore, it offers the pleasure of bargaining for an even lower price in case of multiple purchases. The above example is only a glimpse of how consumers come in touch with pirate products. The pictures have been taken whilst sitting down at a fast food restaurant in Greece. This scenario is part of every day life in Greece. Consumers are being approached at several locations at all times during the day. Coffee shops, retail stores and public places such as bus stops, the beach are some of the most preferable locations. Reports have been made of immigrants entering work places at regular intervals and conduct business with their regular clientele. Furthermore in the centre of the capital counterfeit salesmen can be found on the streets displaying their merchandise in public. Despite official statistics, it is estimated that the ratio of CD circulation on pirate and legitimate CD’s is 3:1 accounting for 30 million units inside Greece every year. This corresponds to a rough figure of 570 million euros in sales. More evidence and detailed information can be found in the findings of the research concerning the issue of music piracy in Greece.
A new decrease of 8.6% of the total gross profit of music related products was reported in 2003. The total number of sales of all the record companies’ members of the Greek IFPI just reached € 56 098 575 from € 61 361 110 in 2002. In addition a 6.8% decrease was reported in the number CD’s sold throughout 2003. The number of CD’s sold in 2003 was 7 147 280 where in 2002 it was 7 670 317. In these last years, the Greek recording industry approximately 25% of sales due to the epidemic of counterfeit CD’s that has flooded the nation. The immigrants which mostly come from Nigeria have spread an illegal trade of counterfeit CD merchandise which as a result causes the legal market to shrink and for all the related industries to suffer great losses. The fact that this illegal trade goes unpunished by justice has caused the Geek police to look at the issue with contempt and taunt. If this outrageous situation continues to take place, the future of the Greek music industry is expected to be very dim. The Greek music industry will not last very long under this apathy of the endless violation of intellectual property rights. The seriousness and the humongous magnitude of the piracy problem as an issue, forced the research process to examine any potential way out from the perspective of consumers behaviour. Thus this paper tries to analyse and evaluate the significance of buying attitudes, human behaviours and reactions and how they influence the magnitude of the problem in Greece.
Chapter 3: Literature Review This chapter of the dissertation will be devoted to critically analyse several reviews of literature on Consumer Behaviour in relation to Music Piracy. The connection between the two topics is apparent. What is more, it is believed that certain elements of consumer behaviour lead to the purchase of pirate music products. This literature review has tried to cover most of the areas of interest on the topic of consumer behaviour and relate it to the purchase of counterfeit CD buying. It was apparent that before recommendations could be given as to how the outrage of counterfeit CD buying in Greece could be improved; a substantial amount of research based on existing literature would have to take place. It was evident that among other fields, the solution to the problem lies within the field of consumer behaviour. Understanding the behaviour of consumers that purchase counterfeit CDâ€™s is critical in understanding the problem. A substantial amount of secondary research was needed in order to locate literature on consumer behaviour concerning the purchase of counterfeit products. The backbone of this literature review is based on two journal article that where published in very respectful journals. Both of the articles can be found as an appendix. It is significant that one of the articles was solely based on counterfeit CD buying where. The other discussed consumer behaviour of buying several products of counterfeit nature. Although both articles made similar observations on consumer behaviour, they managed to go into different areas of interest. The review of the articles was fully supported with consumer behaviour literature from books and other sources of academic writing in order to fully grasp the concepts and theories that the articles referred to.
The review provides the basis for the research that will follow on the Greek consumers. The areas of consumer behaviour that have been discussed above will need to be explored in order to be able to make recommendations for the future. Through the review of the articles and literature it was possible to identify the most important areas of interest that the research will be focused on. Initially the wider environment of consumer behaviour needs to be examined, in order for the reader to attain an introduction into Consumer Behaviour as a field of marketing. Consumer behaviour can be looked at as the consumption behaviour of people. Solomon (1999) defines Consumer Behaviour as: “the process involved when individuals or groups select, purchase use or dispose of products, services ideas or experiences to satisfy needs or desires”1. Consumer Behaviour is a relatively new field in marketing (it started being offered to marketing students throughout the 1970s). As the topic is explored by academics it is being influenced from many different perspectives. One could argue that it is a field that is very interdisciplinary. The topic can be examined from a very wide range of field experts, ranging from psychophysiology to marketing. Consumer Behaviour involves more than products, services, activities, and ideas it is more than buying. It is a dynamic process that can involve many people and many decisions. Consumer behaviour is affected by several factors; internal consumer processes “The Psychological Core”, the process of making decisions, the external processes “The consumers Culture” and the outcomes of past consumer behaviour attitudes.
Consumers’ motivation, ability, and opportunity affect their decisions. These factors influence what consumers are exposed to, what they attend to and what they perceive, how they categorize or interpret information, how they form and change attitudes, and how they form and retrieve memories. Each of these aspects of the 1
M. Solomon, G. Bamossy, S. Askegaard, (1999), Consumer Behaviour A European Perspective, Prentice Hall
psychological core has a bearing on consumer decision-making. Decision-making itself is based on problem recognition and the search for information, involves some judgment and decision making processes, and affects others’ decisions as well as one’s own postdecision satisfaction level. Furthermore, consumer decisions are affected by the consumer’s culture, defined as the “myriad groups” and “social systems” to which individuals belong that influence the values and beliefs they hold and the symbols they use to communicate group membership. Factors associated with both the psychological core and culture can influence outcomes such as symbolic consumer behaviour and the diffusion
Studying consumer behaviour can provide useful input to marketing strategies like market segmentation, target market selection, and positioning. It can also guide marketing tactics like product, pricing, distribution, and promotion decisions. Furthermore, the study of consumer behaviour can be of interest to ethicists and consumer advocacy groups, and can be helpful in designing laws and regulations that protect consumers. Finally, it can help consumers to improve their own lives by making the environment more user-friendly, safer, cleaner, and healthier. Having been introduced to the field of Consumer Behaviour, the reader should now be able to make the connection between Music Piracy and Consumer behaviour. It is very likely that aspects of consumer behaviour relate with the purchase of pirate products. This literature review will try to examine aspects of consumer behaviour that are relevant to the problem and are assisting counterfeit products demand as well as those aspects that could have the opposite effect. A journal article published by the “International Marketing Review”2 proved to be very helpful in identifying the aspects on consumer behaviour that interrelate with counterfeit products. This article can be found in Appendix 3 The article tried to identify determinants other than price that affect consumers that purchase counterfeit products in 2
“Non-price determinants of intention to purchase counterfeit goods: An exploratory study”, International Marketing Review, Vol. 12 No. 6, 1995, pp. 19-46
general. In the introduction the author wishes to establish what is meant by counterfeits and thus provides the reader with a definition. “Counterfeiting – the production of copies that are identically packaged, including trade marks and labelling, copied so as to seem to a consumer the genuine article (Kay, 1990)”. The author then goes on to mention that counterfeiting is a result of marketing “counterfeiting continues to flourish because multinational marketing has created high worldwide demand for well-known brands”. Keeping in mind that counterfeits are priced much lower than original products, one can come to the conclusion that the element of price makes them more attractive. From introductory economics it is known that a reduction in the price of X will result in an overall rise in the quantity demanded of good X. However, it is believed that it is more than the element of price that makes consumers purchase counterfeits. The aim of this study is to explore issues in consumer behaviour that influence such purchases. The article then examines non-price determinants that influence consumers’ decisions. By reviewing Consumer Behaviour literature the authors are able to identify eight main causes for counterfeit products purchasing behaviour. They are separated into three categories: •
3.1 Psychographic Variables Psychographics seek to classify people according to their personality traits. They are used mostly in relation to consumer products. There is some debate over whether psychographics should be restricted to issue sociability, self-reliance, assertiveness and other personality traits, or whether it should be widened to include lifestyles, attitudes, interests and opinions. Over time psychographics have come to be discussed from a lifestyle perspective. In this part of the project the literature behind the psychographic variables that relate to counterfeit buying will be discussed. It is important to identify and
understand the theory behind psychographic variables and make a connection with the purchase of counterfeit CD’s. Once the connection is established and by using appropriate research techniques, the paper will uncover valuable information on consumers in respect to attitudes, perceptions, social influences etc. The first variable that is pointed out in the article is the one of “Attitude”. Attitude is well established that it influences behavioural intention. It is believed that if a person’s attitude towards counterfeiting is favourable, it is highly possible that they would consider the purchase of counterfeit products. Furthermore, if a person holds an unfavourable attitude towards the image that high-end market products are trying to promote; they are likely to purchase the branded good. It has been suggested that most people who buy counterfeit products think of themselves as penny-wise shoppers, who have not fallen for the arrogance and exorbitance of businesses selling originals. Considering the above the research will try to examine consumers’ attitudes towards counterfeits. The research will test some of the beliefs listed above as well as others that might appear in the process. The second variable that is mentioned in the article is the one of “Brand Status”. An individual’s consumption pattern symbolises the social class position in which they are in and is a very important variable in the buying behaviour asides income. Given that people tend to associate themselves with the current social class position they are in or the class above them, they are more likely to buy branded products which can convey brand status of prosperity, wealth and social class. Keeping all the above in mind, if the brand status of a product is important to a consumer, but they are unable to pay for the original brand, it is possible that they will turn to counterfeit products as substitutes and a cheaper way of buying class. Although this variable does not clearly relate to consumers behaviour for purchasing counterfeit CD’s it is thought that it could be used when conducting a communication plan to convey a message. Part of the research will focus on consumers and investigate the possibility that by communicating such a strong message could have any effect on their buying behaviour. As an example the message employed
through the communication plan could promote the idea that users of counterfeit CD’s are people of inferior status than those that purchase originals. The third variable that is mentioned in the article is that of “Materialism”. The article defines materialism as: “the importance a consumer attaches to worldly possessions”. The article explains that at extreme cases of materialism, certain products and possessions might hold a central position in a consumer’s life and provide grate satisfaction or dissatisfaction. Counterfeit products are considered by consumers’ as “lower cost means of satisfying their material needs”. In result the more materialistic a consumer is, the bigger chance they have to purchase counterfeit products. In the above sense, a consumer that has the need to purchase large amounts of CD’s regularly is more favourable to purchase them in counterfeit form. However that may not always be the case and it is a variable that be examined in the research in order to make clear judgments on the matter. The next variable mentioned in the article is that of “Novelty Seeking”. This variable is used to explain consumers’ attitude to carry out curiosity needs. There is strong evidence that consumers occasionally seek diversity and innovation just out of curiosity. Novelty Seeking is defined as the search for something new and strange. This is often found to exist with products of low purchase risks. Novelty seeking may arise out of consumers’ disappointment with product attributes, or with the brands they frequently purchase. Thus novelty-seeking consumers are more likely to purchase counterfeit products, as these are low cost means of satisfying their curiosity and need for experimentation. The possibility of consumers purchasing counterfeit CD’s due to novelty seeking is very high. Most consumers are very likely to have purchased a counterfeit CD at least once, in order to satisfy their curiosity towards the product. The research will try and look into the variable of novelty seeking. It will examine the possibility that purchases of counterfeit CD’s caused by novelty seeking could result in long time purchases and increasing interest towards those products.
The next variable that the article refers to is “Risk Taking”. Risk talking can be found in most purchase decisions made by consumers. Risk influences consumers in the sense that they cannot always be certain of the achievement of their buying goals. The purchase of counterfeit products might appear to be risky course of action by consumers. The loss of money (financial risk) through purchases of faulty and untrustworthy products (performance and functional risks) is very probable. Furthermore “Social Risk” involved in the purchase of counterfeit products is a very important element. If the social group, to which a consumer belongs in, does not approve counterfeit purchases, the person might run a risk of being looked at negatively by his/her peers. The authors of the article provide a very accurate description of the situation “higher income consumers associate socially more with people who are apt to be able to detect counterfeit products, hence these consumers are unlikely to purchase counterfeit products”. The authors then come to the following assumption, which will be tested in the research: “consumers who are averse to financial, product, and social risks are less likely to purchase counterfeit products”. It is believed that the element of risk in consumer behaviour is vital in understanding consumers that purchase counterfeit products. Thus a more detailed literature review on “Risk Taking” is essential. Consumers must constantly make decisions regarding what products or services to buy and where to buy them. Due to the outcome or consequences of such decisions being many times uncertain, the consumer perceives some degree of “risk” in making a purchase decision. Perceived risk is defined as “the uncertainty that consumers face when they cannot foresee the consequences of their purchase decision” Consumers’ perception of risk varies, depending on the person, the product, the situation and the culture. The amount of risk perceived depends on the specific consumer. Some consumers tend to perceive high degrees of risk
It is commonly known that purchase decisions that involve extensive search also involve some kind of perceived risk, or the belief that the product has potentially negative consequences. Perceived risk may be present if the product is expensive or is complex and difficult to understand. Alternately, perceived risk can be a factor when a product choice is noticeable by others, and there is a risk of embarrassment if the wrong choice is made or if the product is not acceptable by others. According to Solomon 1999 there are five basic kinds of risk. They are either objective (physical danger) or subjective (social embarrassment). Each one of the five categories is listed below together with an explanation of the perceived risk in each case. Monetary Risk: The perceived risk is made up from money or property. People with low incomes and little wealth are found to be the most venerable from this form of risk. In addition high priced items are affected from this form of perceived risk. Relating to the risk involved when purchasing counterfeit music products, consumers may feel that CDâ€™s are highly priced and substantial expenditures are required to purchase them. As a result the perceived monetary risk may be high with many consumers when choosing to buy an original CD. Functional Risk: This risk occurs due to alternative means of performing the function or meeting the need. Furthermore, this occurs when there is drought about the quality of the product. Consumers that purchase counterfeit CDâ€™s are faced with this type of risk every time. The reason behind this is the fact that counterfeit products offer no quality assurance or guarantee and if faulty they can not be returned. Social Risk: Products that are visually visible by others may be subject to such risk. (e.g.: clothes, cars, sports equipment etc). It might be possible for counterfeit CD buyers to associate with this type of risk. Considering the fact that they are committing a crime, consumers might be embarrassed to use the counterfeit CDâ€™s in the presence of others. As mentioned before social risk is very important when purchasing counterfeit products as society or the status group of the consumer might not approve counterfeit purchases.
There are two remaining categories that are associated with consumers perceived risk. They are physical risk and psychological risk; however they cannot be linked with the purchase of counterfeit CDâ€™s. It is now noticeable to the reader that there are three categories that perceived risk can influence consumers behaviour in the purchase of counterfeit CDâ€™s. Hence the research that will be conducted on consumers will try to investigate the areas of perceived risk that affects consumers in their purchases of counterfeits.
3.2 Product-Attribute variables When used in a market research context, "Attributes" are simply properties of a given product, brand, service, advertisement or any object of interest. Much brand and market research is targeted at understanding the most significant and powerful attributes of a product/service/brand or product/service/brand class. A product, service, or brand can have many attributes including cost, value for money, prestige, taste, usability, liking ("affect") and a wide range of image or personality attributes. To use one very common example, the car or "automobile" brand class can sometimes include attributes such as prestige, cost, reliability, exclusivity, availability, type (e.g. sporty, family, luxury) and country of origin. Usually a client wishes to measure their product or brand as perceived by target markets along several attributes they see important to the brand. If they are in a competitive market, they also sometimes need to know how they rate against competing offerings. A key mistake in attribute-based research is for the most significant attributes to be missed, or the attribute definitions to be posed in such a way as they are not clear to the consumer subject pool. The former often occurs when a brand is product rather than consumer driven. It is often important therefore for research aimed at "un-covering" the salient attributes of the product according to the consumer, rather than the client, to be conducted also. In "brands", where attributes are often related to brand personality, image
and brand identification related variables, these can often by uncovered by qualitative and depth interview techniques. The study conducted by the authors in the article identified six perceived product attributes that have an impact on consumers’ behavioural intention towards counterfeit products: durability, image, perceived fashion content, physical appearance, purpose, and quality. According to the article researchers have been able to group the attributes above and group them into three categories: characteristics (physical properties); beneficial (what the product will do for the user); and image (how the product represents the user to others or self). In line with this distinction, the authors identified durability, quality and physical appearance as three relevant “characteristics” consumers look for when considering purchase of counterfeit products. Relating this to the purchase of counterfeit CD’s, it will be important to examine these variables when conducting research on consumers. The characteristics of counterfeit CD’s should be considered the most important attributes of these products. A comparison between counterfeit and original products in terms of durability, quality and physical appearance needs to be clearly established. Further more the research will need to investigate whether differences in the characteristics between the two types of products can be used in favour of the record labels to try and shift consumers to purchase originals. Given the relatively short product life cycle experienced by music CD’s, most consumers are generally reluctant to spend an large amount of money on them, as these products are usually in trend for only a limited period of time, after which they would be rendered obsolete. If such products are being counterfeited and then sold at cheaper prices, the possibility of people buying these counterfeit products will be high.
3.3 Demographic variables
Buying decisions often depend upon a person’s demographic profile. With-in this, any of the following variables can be relevant to an individuals buying decision. •
Age: There are many needs that are age-dependent, for instance baby food for the very young, mobility aids for the very elderly.
Stage in life cycle: Furniture purchases are likely to be more dependent upon stage in the life cycle than upon age.
Occupation: More expensive clothing is purchased by white-collar workers.
Economic circumstances: Many products are very much dependent upon perceived discretionary income e.g. Records, theatre tickets, books etc.
Lifestyle: This may increase the need to minor luxuries. The retail industry is especially interested in these factors outlined above as the
study of demographics plays an important role in the prediction of consumer behaviour and their spending patterns. In general, organisations have to be especially mindful of how they target customers to encourage them to buy, as demographics can have a large influence on customers spending capabilities. According to the article the authors state the importance of demographics to be “Demographic changes affect marketplace opportunities and threats, through changes in consumers’ purchase behaviour”. In order to reveal a connection between demographics and the intention to purchase counterfeit products the authors have identified three commonly used but important demographic elements: age, educational attainment, and household income. In the article there is mention of a previous study which found that the “consumer’s age, educational background, and family economic background are significantly correlated with their attitude towards software piracy”. According to this last statement, the research that will be carried out will look into the same demographics to try and establish some relationship variables. It is generally expected that the tendency to purchase counterfeit products to vary across subjects of different age, educational attainment, and household income. “Maturity which comes with age, discernment which comes with more education and purchasing power which comes with higher household
income, may covariate with other non-price determinants in influencing the consumer’s intention to purchase counterfeit products”. Having critically reviewed the article “Non-price determinants of intention to purchase counterfeit goods: An exploratory study” it was evident that the background literature on consumer behaviour has an apparent connection with the purchase of counterfeit CD’s. However it is believed that other than the three categories that consumer behaviour is divided in the article there are more fields of consumer behaviour that reach the topic. For this, it was critical to review more literature related to the topic and identify further theories to implement in the research. An article published by the Journal of Consumer Marketing and titled “Spot the difference: consumer responses towards counterfeits” 3 shed light onto more areas where consumer behaviour influenced counterfeit purchases. The whole article can be found in Appendix 4. According to the article, initial studies indicate that there are two drivers of counterfeit-purchase behaviours: •
the attractive pricing of fake products; and
the self-image of the consumers who buy such products. The two areas listed above, where also found by the first article that was
examined. The authors then mention that further studies extend by going beyond the influence of price and self-image on counterfeit-purchase behaviours. According to the article there are 5 basic categories that influence consumers’ attitudes towards counterfeit products.
perceived risk in buying fake products;
perceived harm/benefits to singers, music industry, and society;
morality/ethics of buying fake products;
“Spot the difference: consumer responses towards counterfeits” Journal of Consumer Marketing, Vol. 18, N o. 3, 2001, p.p. 219-235
personality factors. Three out of the five categories where analysed in the review of the first article.
However this article goes to mention another two categories that need to be further looked into. The first category is that of “perceived harm/benefits to singers, music industry, and society”. In that sense the authors have tried to examine the issue from a different point of view other than the consumers.
3.4 Perceived harm/benefits to singers, music industry, and society In the case of counterfeit CD purchases, buyers may not feel they are acting in a wrong manner and blame the original-product manufacturers for charging such outrageous prices. The article mentions that Cordell et al’s (1996) had an argument that double standards are employed. Potential buyers of counterfeit products do not hold themselves accountable for their action but hold counterfeit sellers as responsible. In line with these beliefs and ethics the buyers continue to purchase counterfeits. Another explanation for the purchase of counterfeits is that, such products benefit the society as more people get to enjoy products/music that they otherwise could not afford. Counterfeits and their distribution system therefore make these products widely available to the masses. In the CD industry, it could be said that the situation is not unreasonable for the artists as they enhance their popularity. However this is the case with new upcoming artists. The already established ones do not need counterfeit products to become popular as they already are. Consumers who cannot afford to buy the originals can still enjoy the talents of these entertainers if they buy the counterfeits. However many entertainers may feel they are being robbed off the work they have put in. The bottom line is that consumers that purchase counterfeit products are stealing the rights from the production companies and the artists. It is also believed that consumers might tolerate and participate in non-normative behaviours by excusing themselves from blame and deflecting such blame to another party.
Having reviewed the first article, it was evident that social and personal factors influence consumers’ behaviour in the purchase of counterfeit CD’s. However this second article goes further in analysing these two factors in more detail. Thus it is necessary that the literature review further extends into those two fields.
3.5 Social influences Social pressure can influence individuals to follow as well as break rules. The most obvious example of social influence is peer pressure. Each consumer will be influenced by social pressure in their attitude differently; depending on the weakness or strength of their character. Consumer weakness or “susceptibility” is “the need to identify with or enhance one’s image in the opinion of significant others through the acquisition and use of products and brands, the willingness to conform to the expectations of others regarding purchase decisions, and the tendency to learn about products by observing others or seeking information from others (Bearden et al., 1989, p. 474)”4. Susceptibility comes in two forms. The first form is that of consumers being susceptible on information, and the purchase decisions they make are based on the expert opinion of others. In these cases, the view of the ‘expert’ regarding quality and their opinion towards the outcome of the decision are critical. Usually this form of susceptibility occurs when a consumer has little or no knowledge concerning the product category. The second form of susceptibility is normative. Normative susceptibility concerns purchase decisions that are based not on the expert opinions of others, but on the expectations of what would impress others. Social peers such as friends and family that feel originals have differential advantages over counterfeits and are aware of the negative consequences of buying counterfeits; have an impact on consumers and influence them 4
“Spot the difference: consumer responses towards counterfeits” Journal of Consumer Marketing, Vol. 18, N o. 3, 2001, p.p. 219-235
by stressing out the drawbacks of counterfeits. Hence, information susceptible consumers are expected to have a negative attitude towards piracy. Likewise, normative susceptible consumers are expected to have a negative attitude towards piracy. If buying counterfeits does not make a good impression on others and looking good is important, then attitude towards piracy will be less favourable. For informational and normative influences to be effective, the source of such influence must come from people that are important to the consumer; “people whose views count”.
3.6 Personality influences Value consciousness Value consciousness is defined as: “a concern for paying lower prices, subject to some quality constraint (Lichtenstein et al., 1990)”. Previous research has made the distinction that consumers engage in illegal purchases when there are price pressures affecting them. Counterfeit products provide remarkable cost savings to consumers, even though there is some compromise in quality; its perceived value is high. Research has also shown that the majority of consumers will select the counterfeit when there is a distinct price advantage over the genuine product. Consequently, it is expected of consumers that are more “value conscious” to have a more favourable attitude towards piracy than less value conscious consumers. Integrity Research also shows that consumers who are more lawful-minded are less willing to buy counterfeits. Consumers with lower ethical standards “are less likely to feel accountable for knowingly buying a counterfeit”. Instead, such consumers rationalize their behaviour and do not see their purchases of counterfeits as unethical or even illegal. Hence, it is expected from consumers who value integrity to be less favourable to purchase counterfeit CD’s and their attitude towards piracy to be negative.
Personal gratification Most counterfeit CDâ€™s do not provide comparable levels of quality to the genuine products. The sound quality is not of comparable quality and the packaging is of much lower standards. Nonetheless, consumers who buy counterfeits are willing to sacrifice the premium quality of originals and do not mind giving up any product warranty that is associated with the original product. Personal gratification is thus less important to them. â€œPersonal gratification concerns the need for a sense of accomplishment, social recognition, and to enjoy the finer things in lifeâ€?. Previous research has shown that noncounterfeit buyers where less confident, less successful and perceived their status to be low. The characteristics of consumers that purchase counterfeits are associated with individuals who seek accomplishment, comfortable living, and social recognition. Therefore, it is expected that consumers who value personal gratification will have a less favourable attitude toward piracy. Having analysed all the relevant literature listed above it is evident that the link between counterfeit CD purchasing and consumers behaviour is apparent. The area subjects of consumer behaviour that where brought forward in the review will need to be examined through research on the Greek public. The next chapter of the thesis will describe the research that took place on the Greek market in order to reveal crucial data about the issue of piracy in Greece and consumer attitudes.
Chapter 4: Methodology It was absolutely crucial that before arriving to any sound conclusions a substantial amount of research would have to be carried out. This section of the dissertation project will focus on explaining the methodology behind the research that was conducted on the topic The aim of the research was to analyse and examine the problem from all perspectives in order to make sure that any conclusions that would derive would be very objective and as close to reality as possible. Considering the fact that the topic of “Marketing and Piracy” in Greece is very exploratory it was decided that most of the research should be of Primary manner. It was apparent that according to the principles of marketing theory concerning research methods, our research would require the collection of both Qualitative and Quantitative data. Qualitative and Quantitative Research
A starting point in trying to understand the collection of information for research purposes is that there are broadly two approaches: quantitative research and qualitative research. An early form of research originated in the natural sciences such as biology, chemistry, physics, geology etc. and was concerned with investigating things which we could observe and measure in some way. Such observations and measurements can be made objectively and repeated by other researchers. This process is referred to as “quantitative” research.
Researchers working in the social sciences: psychology, sociology, anthropology etc. They were interested in studying human behaviour and the social world inhabited by human beings. They found increasing difficulty in trying to explain human behaviour in
simply measurable terms. Measurements tell us how often or how many people behave in a certain way but they do not adequately answer the question “why?”. Research which attempts to increase our understanding of why things are the way they are in our social world and why people act the ways they do is “qualitative” research. Qualitative Research Data are not inherently quantitative, and can be bits and pieces of almost anything. They do not necessarily have to be expressed in numbers. Frequency distributions and probability tables don't have to be used. Data can come in the form of words, images, impressions, gestures, or tones which represent real events or reality as it is seen symbolically or sociologically (If people believe things to be real, they are real in their consequences - the Thomas Dictum). Qualitative research uses unreconstructed logic to get at what is really real -- the quality, meaning, context, or image of reality in what people actually do, not what they say they do (as on questionnaires). Unreconstructed logic means that there are no step-by-step rules, that researchers ought not to use prefabricated methods or reconstructed rules, terms, and procedures that try to make their research look clean and neat (as in journal publications). It is therefore difficult to define qualitative research since it doesn't involve the same terminology as ordinary science. The simplest definition is to say it involves methods of data collection and analysis that are non-quantitative (Lofland & Lofland 1984). Another way of defining it is to say it focuses on "quality", a term referring to the essence or ambience of something (Berg 1989). Others would say it involves a subjective methodology and ‘Your’ self as the research instrument (Adler & Adler 1987). Everyone has their favorite or "pet" definition. Historical-comparative researchers would say it always involves the historical context, and sometimes a critique of the "front" being put on to get at the "deep structure" of social relations. Qualitative research most often is grounded theory, built from the ground up. Quantitative Research
Quantitative research is one of the most frequently used modes of research in the social sciences. In a typical survey the researcher selects a sample of respondents and administers a standardised questionnaire to them. In some cases it is appropriate to have the respondents complete the questionnaires themselves and in other times it is more appropriate to have interviewers ask the questions and record the answers given. This latter technique can be used in face to face interviews or over the telephone. Surveys may be used for descriptive, explanatory and exploratory purposes. They are used in studies that have individual people as units of analysis. Although this method can be used for other units of analysis such as groups, it is necessary that some individual person is used as respondent or informant. Survey research is probably the best method available to social scientists interested in collecting original data for describing a population too large to observe directly. Careful probability sampling provides a group of respondents whose characteristics may be taken to reflect those of the larger population and carefully constructed standardised questionnaires provide data in the same form to all participants. Surveys are also good for measuring attitudes and orientations in a large population. For example, Public opinions polls on politicians. After having revised both Qualitative and Quantitative research, it was now time to put to use some of the tools of modern Marketing research. After careful consideration it was decided that the research would employ the following marketing research tools. â€˘
Depth Interviews (4) Qualitative
Focus Groups (2) Qualitative
Questionnaires (80) Quantitative At first the research plan was scheduled to conduct a secondary research on the
topic in order to identify certain elements that could be useful in our analysis. After a substantial amount of secondary research it was evident that the topic would be
exploratory as there was very little information on it and no similar research was ever carried out in the past. As a result, it was decided that the best way to approach the topic would be to employ several modern marketing techniques of Primary nature. After establishing that the topic is exploratory, any quantitative research would need to be put on hold. The topic itself required that the research conducted would examine the wider environment. The researcher would need to go back and examine more parameters Having considered all the above, it was necessary to collect quality information from both producers and consumers. Qualitative research is a method that deals with information that is based on descriptions and shades of meaning rather than numerical analysis. It is commonly used in the early stages of all the ad hoc research studies. In general it involves unstructured exploration or inductive problem-solving techniques. The parameters and the parties that are directly involved in describing and forming the problem can all be investigated through quality discussions either in the form of In-depth interviews or Focus Group discussions. However, the focus group discussions could not be formed with members working in the music industry; as it is only natural that they might be reluctant to express their opinions in front of the opposition. The most suitable parties for obtaining this sort of Primary information through the technique of in-depth interview are those who are directly involved with the specific industry and are suffering from the problem of music piracy. Such parties in any case would be staff from the marketing departments of record production labels who are faced with the problem on an everyday basis. They are the ones that could extensively unfold and describe in detail the issue of piracy, its magnitude, as well as the potential marketing activities that might help in overcoming this serious problem. The discussions in the indepth interviews will also provide valuable information for the researcher to help address certain issues when researching on consumers as the process of focus groups is deployed.
4.1 In-Depth Interviews Having fully considered the importance of gathering information directly from the key players of the industry, it was initially scheduled that a series of in-depth interviews would need to be carried out. The individuals interviewed where all members of record labels and worked within the marketing department of their firms. In addition an interview was scheduled with the CEO of a Greek organisation that is responsible of maintaining and upholding the laws when it comes to copyrights protection. In-depth interviews are similar to group discussions or focus groups. Often referred to as one to one, they are used to uncover underlying motivations, prejudices and attitudes towards sensitive issues. The format remains unstructured, the interview is usually conducted by a researcher, and projective techniques may also be used. In-depth interviews are ideal for investigating personal, sensitive, or confidential information which is unsuitable to cover in a group format. They are also the best method for advertising pre-testing, where we are seeking individual interpretations and responses.
The disadvantage of in-depth interviews is that the respondent may feel like â€˜a bug under a microscopeâ€™ and be less willing to open up than in the relaxed atmosphere of a group. A skilled interviewer can overcome this to a large degree, through the establishment of good rapport and trust.
In-depth interviews afford respondents the opportunity to describe their customers, systems, suppliers of hardware, software, and network systems, as well as any synergies (or lack thereof) that have developed between them. Respondents may fully
explain their requirements for these systems as they relate to the use of other existing or pending systems (hardware, software, and networks), their marketing strategies, etc. Respondents may speak candidly about their experiences with suppliers, their decision making criteria, their telecom and IT strategies, their perceptions about price, and so on.
Like focus groups, the primary stimulus for in-depths is the moderatorâ€™s guide. However, the discussion guide is often much more detailed and specific, with lines of questioning that might be glossed over in a focus group. In some cases, it may contain a specific question-answer format, but more typically will follow a choreographed sequence of discussion areas. As in focus groups, the guide reflects input from both moderator and client.
Having carefully gone through all the relevant theory behind the technique of indepth interviews, there were several actions that needed to take place to help schedule the desired appointments. The first requirement was to locate the record labels. For this a book of all known Greek Ltdâ€™s was used. The book listed all Record Labels giving information such as: address, contact numbers, as well as the size of the company according to the number of employees and the annual revenues.
When selecting the companies to be interviewed, the sample had to cover all size companies. This is mainly a way to identify any problems and any issues that may arise from the size of the company. The initial selection included 13 record labels. The next step required the preparation of a covering letter that would be sent to the companies. The letter explained the purpose of the research. The original copy of the letter was in the Greek language but a translated version can be found in Appendix 5 in order for the reader to get an idea of the format and style of writing used in the letter. The letter was then sent by mail to the record labels.
In the week to follow, a follow-up call was made to the companies asking them if they had received the letter and when would be the most suitable time to schedule the interview. In theory scheduling an appointment might seem like an easy task, but in practice it turned out to be more challenging than one might think. It is worth mentioning that out of the 13 letters in total sent out to companies it was only possible to schedule 4 appointments. More over, in order to even schedule the 4 interviews, a lot of follow-up calls were required and the need to exercise an amount of persuasion and pressure on the interviewees was evident. The 4 interviews were scheduled to take place within a time period of 2 weeks.
Before attending any of the interviews, the preparation of a discussion guide was crucial. The guide was designed in a way to set the pace of the discussion as well as to cover certain topics that was necessary to be addressed in a particular order. However the discussion guide was used to help the interviewees elaborate on certain issues rather than have them answer questions. Thus the conversation was to some extent unstructured. A copy of the discussion guide can be found in Appendix 6. All the interviews where recorded on tape, however permission had to be gained for the conversation to be recorded. All the interviewees gave their permission for the interviews to be recorded on tape. The average time that the interviews lasted was between 45 minutes to an hour depending on the pace of the discussion. Initially the discussion guide was designed to warm up the employees by asking several questions on the topic of music piracy in Greece. Later on in the conversation several topics were brought on discussion and the interviewees where more free to elaborate further on the topics.
During one interview it was advised to contact the Greek firm responsible for copyrights in Greece. The name of the company is AEPPI. Due to time constraints the procedure of sending a cover letter was waived and the initiative was taken by going directly to the firm. It is worth noting this firm is very similar to the UK firm F.A.C.T. (Federation Against Copyright Theft) and an interview with one of its high ranked employees could provide valuable information for further research. Luckily an interview
with the companies CEO was scheduled on the spot. Furthermore the company was happy to supply evidence of past research on the issue of piracy. Unfortunately the company is mostly concerned with the legal issues (not marketing) of copyright and the results from previous research that they had conducted could not be seen as very valuable. However the interview turned out to be a success as new valuable information was recorded. Together with the last interview of AEPPI, the total number of in-depth interviews went up to 4. It was now time for the information collected to be decoded. This required the decoding of the discussion tapes in order to be able to stretch all the key important points made throughout the discussion. The information collected from the interviews with record label employees would be the basis for further research to be conducted on consumers.
4.2 Focus group Interviews The next face of the research program required to schedule a series of focus groups on consumers. Focus group interviews are an inexpensive, rapid appraisal technique that can provide managers with a wealth of qualitative information on performance of development activities, services, and products, or other issues. A moderator guides 6-12 people in a discussion of their experiences, feelings, and preferences concerning a subject area or a topic. The moderator raises issues identified in a discussion guide and uses probing techniques to seek views, ideas, and other information on the desired topic. Sessions typically last from one to two hours. Advantages and Limitations: This technique has a number of advantages. â€˘
It is low cost and provides speedy results.
Its flexible format allows the moderator to explore unanticipated issues and encourages interaction among participants.
In a group setting, participants provide checks and balances, thus minimizing false or extreme views.
Focus groups have some limitations. •
The flexible format can undermine the validity and reliability of findings.
Discussions can be sidetracked or dominated by a few vocal individuals.
Focus group interviews generate relevant qualitative information, but no quantitative data from which generalizations can be made for a whole population.
The information can be difficult to analyse
Comments should be interpreted in the context of the group setting.
The usefulness of Focus Group Interviews: Focus group interviews can be useful in all phases of development activities planning, implementation, monitoring, and evaluation. They can be used to solicit views, insights, and recommendations of programme staff, customers, stakeholders, technical experts, or other groups. The use of Focus Group Interviews can be appropriate when program activities are being planned and it is important for managers to understand customers' and other stakeholders' attitudes, preferences and/or needs. Furthermore there are certain services and products that need to take into account customer preferences. Other times, focus groups are used when major program implementation problems cannot be explained or even when recommendations and suggestions are needed from relevant public. Steps in Conducting Focus Group Interviews: Step 1. Select the team Conducting a focus group interview requires a small team, with at least a moderator to guide the discussion and a medium to record it. The facilitator should be a
native speaker who can put people at ease. The team should have substantive amount of knowledge concerning the topic under discussion. Skills and experience in conducting focus groups are also important. If the interviews are to be conducted by members of a broader evaluation team without previous experience in focus group techniques, training is suggested. Step 2. Select the participants First, identify the types of groups and institutions that should be represented (such as program managers, customers, partners, technical experts, government officials) in the focus groups. This will be determined by the information needs of the study. Often separate focus groups are held for each type of group. Second, identify the most suitable people in each group. One of the best approaches is to consult key informants who know about local conditions. Each focus group should be 6-12 people to allow the smooth flow of conversation. Participants should be homogenous, from similar socio-economic and cultural backgrounds. They should share common traits related to the discussion topic. For example, in a discussion on car preferences, older and younger participants should participate in separate focus groups. Ideally, people should not know each other. Anonymity lowers embarrassment and prevents formation of cliques. Step 3. Decide on timing and location Discussions last one to two hours and should be conducted in a convenient location with some degree of privacy. Focus groups in a small village arouse curiosity and can result in uninvited participants. Open places are not good spots for discussions. Step 4. Prepare the discussion guide The discussion guide is an outline, prepared in advance, that covers the topics and issues to be discussed. It should contain few items, allowing some time and flexibility to pursue unexpected but relevant issues.
The guide provides the framework for the moderator to explore, probe, and ask questions. Initiating each topic with a carefully crafted question will help keep the discussion focused. Using a guide also increases the comprehensiveness of the data and makes data collection more efficient. Its flexibility however can mean that different focus groups are asked different questions, reducing the credibility of the findings. Step 5. Conduct the interview Establish rapport. Often participants do not know what to expect from focus group discussions. It is helpful for the facilitator to outline the purpose and format of the discussion at the beginning of the session, and set the group at ease. Participants should be told that the discussion is informal, everyone is expected to participate, and divergent views are welcome. Phrase questions carefully. Certain types of questions impede group discussions. For example, yes-or-no questions are one-dimensional and do not stimulate discussion. Why" questions put people on the defensive and cause them to take "politically correct" sides on controversial issues. Open-ended questions are more useful because they allow participants to tell their story in their own words and add details that can result in unanticipated findings. Examples: •
What do you think about German Car manufacturers?
How do you feel about the upcoming launch of the new BMW?
If the discussion is too broad the facilitator can narrow responses by asking such questions as: •
What do you think about a specific car-manufacturing brand?
How do you feel about the take over of Rover by BMW?
The use of probes techniques. When participants give incomplete or irrelevant answers, the moderator can probe for fuller, clearer responses. A few suggested techniques: •
Repeat the question; repetition gives more time to think.
Pause for the answer a thoughtful nod or expectant look can convey that you want a fuller answer
Repeat the reply hearing it again sometimes stimulates conversation
Ask when, what, where, which, and how questions they provoke more detailed information
Use neutral comments such as: Anything else? or Why do you feel this way?
Control the discussion. In most groups a few individuals dominate the discussion. To balance out participation it is recommended to: •
Address questions to individuals who are reluctant to talk
Intervene, politely summarize the point, then refocus the discussion
Take advantage of a pause and say, Thank you for that interesting idea; perhaps we can discuss it in a separate session. Meanwhile with your consent, I would like to move on to another item.
Minimize group pressure. When an idea is being adopted without any general discussion or disagreement, more than likely group pressure is occurring. To minimize group pressure the facilitator can probe for alternate views. For example, the facilitator can raise another issue, or say, we had an interesting discussion but let's explore other alternatives. Step 6. Record the discussion Tape recordings in conjunction with written notes are useful. Notes should be extensive and reflect the content of the discussion as well as nonverbal behaviour (facial
expressions, hand movements). Shortly after each group interview, the team should summarize the information, the team's impressions, and implications of the information for the study. Discussion should be reported in participants' language, retaining their phrases and grammatical use.
Summarizing or paraphrasing responses can be
Step 7. Analyse results After each session, the team should assemble the interview notes (transcripts of each focus group interview), the summaries, and any other relevant data to analyse trends and patterns. The following method can be used: Read summaries all at one time. Note potential trends and patterns, strongly held or frequently aired opinions. Read each transcript. Highlight sections that correspond to the discussion guide questions and mark comments that could be used in the final report. Analyse each question separately. After reviewing all the responses to a question or topic, write a summary statement that describes the discussion. When analysing the results, the team should consider: •
Words. Weigh the meaning of words participants used. Can a variety of words and phrases categorize similar responses?
Framework. Consider the circumstances in which a comment was made (context of previous discussions, tone and intensity of the comment)
Internal agreement. Figure out whether shifts in opinions during the discussion were caused by group pressure.
Precision of responses.
Decide which responses were based on personal
experience and give them greater weight than those based on vague impersonal impressions. •
The big picture. Pinpoint major ideas. Allocate time to step back and reflect on major findings.
Purpose of the report. Consider the objectives of the study and the information needed for decision-making. The type and scope of reporting will guide the analytical process. For example, focus group reports typically are (1) brief oral reports that highlight key findings; (2) descriptive reports that summarize the discussion; and (3) analytical reports that provide trends, patterns, or findings and include selected comments. Having carefully gone through all the relevant theory behind the technique of
focus group interviews there were several actions that needed to take place to help schedule and prepare for them. The initial step was to organize the discussions. The first task was to determine the number of focus groups as well as the target group of each group. After careful consideration and helpful advice from Hellenic Research House (HRH), a Greek marketing research firm, it was decided that in order to cover a large range of age groups; 2 focus group interviews should be conducted. The first one would include ages from 1823, which eventually consisted of 5 members. The second group would include ages from 25 and above and ended up consisting of 6 participants. Once the groups where decided it was important to then arrange where and when the discussions would take place. HRH was kind enough to let the discussions be held in the companyâ€™s conference room where they normally hold discussions of this form, allowing also the use of the facilities. The discussions where videotaped in order to allow further analysis at a later stage. It was decided that the discussions would be moderated by the researcher himself. At this point it is worth noting that, the focus groups members, where not chosen randomly. The reason behind this is associated with costs. However, special attention was given in order to make sure that the members where strangers amongst themselves and they had never been involved in the study prior to the discussion. Further more the discussion was moderated by the researcher for the obvious reason, to try and push the discussion in areas where vital information could arise. However it is acknowledged that when professional research is conducted, it is extremely vital that certain standards are
maintained. Considering the nature of the research, and the lack of financial aids, the discussions where conducted in the most professional manner possible. Once the discussions where scheduled, it was time to prepare a guide for the discussion. HRH was able to provide useful advice as to what the guide should consist of. Other than a typical discussion guide, HRH proposed to involve the groups into activities. The main reason was that it would be interesting to try and intrigue the participants and make them more interested in the discussion. Having taken the advice into consideration the discussion guide was formed. The format of the guide was similar to the one of the indepth interviews but with several alterations to match the nature of focus groups. A copy of the discussion guide can be found in Appendix 7. The length of the discussion was a little more than an hour in both cases and the discussions where video recorded. It is worth noting that the moderator of the discussion was given the opportunity to monitor a professional focus group discussion on a different topic. The reason behind this was simply to put theory into practice while gaining valuable experience that would result to a more positive outcome. The actual focus groups where held on 2 consecutive days during afternoon hours. The first group the one with the smaller age group was more intriguing and lead to more solid conclusions. In addition the discussion was easier to moderate, the group and all opinions from the members where heard out. In contrast the second group, that of the older age group, could be thought as misleading, the discussion frequently drifted to areas of no relevance to the subject and many opinions where overruled. The main reason for this could lie in the fact that the discussion was moderated by an individual of a much younger age, which in cases led the group to ignore his authority. Once the interviews where held it was now time to decode the discussions and try and obtain quality information. The tapes of the discussion where watched and notes where made on the views and opinions put forward. HRHâ€™s advice on the decoding of the discussions was to try and pick up sentences or phrases held by the participants and try and use them for the quantitative research. In addition comparisons would have to be
made between the views held in the in-depth interviews. The comparison between the consumers’ point of view and the producers’ point of view will prove to be fundamental when trying to provide solutions for the problem of music piracy. Finally, the outcome of the focus groups in conjunction with the results obtained from the in-depth interviews would put the fundamentals for the formation of the questionnaires which was to be the last phase of the research program 4.3 Quantitative Research (Questionnaires)
After having collected quality information from the first 2 phases of the research, it became logical and of major importance to try and give magnitude to the views and opinions put forward. In simple terms to try and confirm that a large number of people stand behind the information that was revealed. The best way to achieve this was through quantitative research and more specifically with the extensive use of a questionnaire. Any information that is expressed and can be summarised by using a numerical method is considered quantitative. It includes not only numerical data, such as those obtained from internal sales and accounting records but also the numerical aspects of other information that is very likely to derive from the questionnaires. Over 75% of all marketing research data is classified as quantitative. Nearly all continuous marketing research lies within this category. Advantages of using Questionnaires •
Questionnaires are very cost effective when compared to face-to-face interviews. This is especially true for studies involving large sample sizes and large geographic areas to be covered. Written questionnaires become even more cost effective as the number of research questions increases.
Questionnaires are also easy to analyze. Data entry and tabulation for nearly all surveys can be easily done with many computer software packages that are available.
Questionnaires are familiar to most people. Nearly everyone has had some experience in completing questionnaires and they generally do not make people apprehensive.
Questionnaires reduce bias. There is uniform question presentation and no middle-man bias. The researcher's own opinions will not influence the respondent to answer questions in a certain manner. There are no verbal or visual clues to influence the respondent.
Disadvantages from using Questionnaires •
One major disadvantage of written questionnaires is the possibility of low response rates. Low response is the curse of statistical analysis. It can dramatically lower our confidence in the results. Response rates vary widely from one questionnaire to another (10% - 90%), however, well-designed studies consistently produce high response rates.
Another disadvantage of questionnaires is the inability to probe responses. Questionnaires are structured instruments. They allow little flexibility to the respondent with respect to response format. In essence, they often lose the "flavour of the response" (i.e., respondents often want to qualify their answers). By allowing frequent space for comments, the researcher can partially overcome this disadvantage. Comments are among the most helpful of all the information on the questionnaire, and they usually provide insightful information that would have otherwise been lost.
Nearly ninety percent of all communication is visual. Gestures and other visual cues are not available with written questionnaires. The lack of personal contact will have different effects depending on the type of information being requested. A questionnaire requesting factual information will probably not be affected by
the lack of personal contact. A questionnaire probing sensitive issues or attitudes may be severely affected. â€˘
When returned questionnaires arrive in the mail, it's natural to assume that the respondent is the same person you sent the questionnaire to. This may not actually be the case. Many times business questionnaires get handed to other employees for completion. Housewives sometimes respond for their husbands. Kids respond as a prank. For a variety of reasons, the respondent may not be who you think it is. It is a confounding error inherent in questionnaires.
Finally, questionnaires are simply not suited for some people. For example, a written survey form a group of poorly educated people might not work because of reading skill problems. More frequently, people are turned off by written questionnaires because of misuse. After having completed the first 2 phases of the research, it was now time to start
preparing for the final and more specific part, the quantitative research. The first step in doing that was to decide on the number of responses required, in order to verify the information collected from the research. HRH advice was to get a feedback from around 50-100 respondents. Considering the fact that all the questionnaires would have to be undertaken by one person it was decided to complete as many as possible. Once that was agreed on, it was now time to prepare the questionnaire it self. Keeping in mind the key aspects from the theory of questionnaires, it was decided to control the length of the questionnaire and limit it to maximum of 10 minutes. The respondents would answer through the telephone and the answers would be directly saved on computer for grater ease. When trying to make the questionnaire it was decided that it would be better if the questions varied in style. To that end many questions where leading to a single response (close ended), while others were leading to multi response (open ended). In addition, a large part of the questionnaire was formed by rating questions/phrases. A copy of the questionnaire can be found in Appendix 8.
The questions where mostly based on information from the qualitative research as well as some further areas of interest that arose later on in the research. As mentioned before the questionnaire would only exist in electronic format. With the use of a specialised software all the questions where formed on the computer and the questionnaire was uploaded on the internet. This was done to be able to monitor its course during the time when the questionnaires where being answered. The preparation of the questionnaire on the software was more time consuming than initially thought. The questions needed to be revised and rephrased frequently and the questionnaire itself needed to be constantly reviewed for errors. Once the questionnaire was prepared on the software and was uploaded on the internet, it was time to start making calls and getting respondents to answer the questions. HRH supplied large lists of random telephone numbers around Greece. When trying to complete questionnaires it is vital to keep in mind that people who respond are not obliged to answer and those involved should be extremely polite and very selective on the time the calls took place. Most of the calls where carried out, during morning hours, or late in the afternoon. The answer rate was around 1:5. At times finding a respondent requires a lot of effort and the frustration could reach high levels. Other times respondents would take long to answer the questions and even go into personal details about their lives. However, having the questionnaires answered through the telephone was very efficient and fast. An average 15 questionnaires was answered every day. Once the number of answered questionnaires reached 80, the frustration had reached extremely high levels and it was decided that 80 was a sufficient number that could lead to sound and solid conclusions. The answers then could instantly be downloaded from the internet in SPSS format and could later be used for further analysis. The whole procedure of making the questionnaire and having it answered by 80 respondents lasted around a week.
With the completion of the quantitative analysis the research had come to an end. The whole research lasted between one and half to two months during the summer. Having to complete the research during the summer made the situation harder. The reason for this is that during the summer months in Greece, most of the people are on vacation and many of the businesses operate at very low speeds with a smaller number of employees as they would usually. However the research managed to overcome most of the difficulties and produce some interesting results. It is worth mentioning, that throughout the research attempts were made not only to investigate the current situation on piracy in Greece and identify the key aspects that where causing the problem; but also to form a range of marketing strategies that would help all parties involved to overcome the problem.
Chapter 5: Findings This chapter of the thesis is dedicated for the reader to be able to learn about all the results and findings that where uncovered throughout the research program explained in the Methodology. Considering that the entire research was carried out during 3 phases it is only natural to assume that there is bound to be discoveries and revelations on the topic through out the research. The findings will be looked at individually for every research tool, but in addition the next chapter that will conclude on the findings as a whole.
5.1 In-Depth Interviews The total number of interviews conducted was four. The first three interviews where conducted with people within the Marketing department of Greek record label firms. The last in-depth interview was with the CEO of AEPPI which is the equivalent IFPI in Greece and is concerned with more legal issues concerning the Greek piracy phenomenon. Listed below are the most important findings that revealed through out the interviews. The findings will be separated according to the topic discussed and it will be clear which of the findings where supported by more than one intervieweeâ€˘.
It is suggested that whilst the reader is going through the findings to be able to read the discussion guide (Appendix 6) at the same time in order to understand what the interviewee was referring to.
Piracy Environment, General Questions In the first question most of the interviewees agreed that the phenomenon of Music piracy in Greece began in the years of 1995-8 and it was in combination with the introduction of lower priced and faster writing speed CD-R’s. Only one interviewee thought that it began in the last 4 years “It is only in the last 3-4 years that the issue of music piracy has become of great importance.” A few of the respondents mentioned that the issue of piracy began even before CD’s where popular and that cassette piracy was also an issue in the past but not to the same extent. When the interviewees where asked to comment of the size of music piracy in Greece, opinions differed and also where measured in different ways. It was believed by 2 respondents that the magnitude of piracy was 50% of all music CD sales. “It is costing the music industry up to double the current production.” Furthermore another respondent believed that there are 18 million copies of pirate CD’s around the world every year. The remaining respondent claimed that music piracy was causing a 14% decrease in sales of music CD’s. All the interviewees shared the same opinion when it came to express their belief as to what is the main distribution channel of counterfeit CD’s. They all thought that counterfeit CD’s are mainly distributed through economic immigrants that are flooding the Greek market with their presence. There is a large distribution network which employees a large number of people to conduct their business. The network has managed to offer consumers door to door service and a large range of counterfeit products. Moreover, all the interviewees agreed that pirate products are accessed by consumers with extreme ease and that this is assisting the problem of music piracy to a great extent. Original products can also be easily accessed by consumers. The interviewees however believed that counterfeits have an advantage over originals when it comes to availability.
Opinions where separated when they where asked, what the government is doing to change this situation. Some believed that the government is doing very little to stop this phenomenon. An interviewee claimed that “The government allows for this to happen because these economic refuges can not make a living otherwise”. Furthermore, it was thought that most efforts to reduce piracy levels where made by the artists them selves, by improving the quality and the packaging they are trying to shift consumers to purchase original products. Better quality music and more competitive price. Another suggestion made was for the government to impose a “tape” like on cigarettes packs. If tape does not exist then arrests could be made. However there was mention of the fact that arrests have started to be made on consumers for the purchase of counterfeit CD’s and that the government is finally starting to take a stand. One of the interviewees mentioned that the Greek topology is also assisting piracy in Greece. The open borders from all sides of the Greek nation assist piracy in the country. The products are hard to locate when they are brought in the country. Half of the products are produced in Greece the other half are imported. Finally the last remarks made on the current situation and how it can be improved, all the respondents felt that in order to improve the situation a group effort needs to be made. The effort that must come from the government is in terms of controlling the distribution of counterfeit CD’s. In addition the Greek record labels also need to fight the phenomenon by better marketing of the products. Better Marketing of the products must be in terms of the 4 P’s, Price, Product, Place and Promotion. If both parties join in an alliance and try to fight the problem together they stand a better chance for success. The situation in other European countries Responses varied as to what is the situation of music piracy in other European countries. Some believed that the same situation exists throughout Europe. However, some of the respondents believed that there are harder measures imposed, more drastic,
and take the issue more seriously. The situation in every European country differs for the reason that the problem is dealt differently in every country. The price differences that exist, as well as the government and the record labels as to what policy they adopt to fight piracy. Further more some countries can better control the imports of music pirate products.
The Greek Culture The respondents when then asked to comment the extent to which the Greek culture is assisting the issue of piracy. The issue of culture seemed to have a small role in the issue, if any. They felt that it favours the situation, but it is not solely responsible. Their reference to culture was brief and none of them felt that it was worth going into as nothing can be done to change the culture of a nation.
Pricing of products The price difference between originals and counterfeits is thought to be the main determinant when consumers are choosing between products. Consumers are very price sensitive, they would prefer original over pirate if there was some reduction in price. However, solely reducing the price, the problem of piracy can not be fought. The respondents where also asked the extent of price reductions that would need to take place. One respondent believed that a price reduction of 30% would be enough to shift consumers’ attitudes. The best response was given in an example put forward by a respondent. “An original CD costs €20 on average and the pirate costs €5. If the original CD was reprised at 50% of the original product price + 50% of the pirate CD price…so around €12.5 consumers would react to such change and would be more willing to purchase the original product”. However some respondents felt that the pricing of products was fair and that the issue needs to be dealt differently. A brilliant point was also made by one respondent; he claimed that record labels exist in a competitive
environment and that if they could bring down prices to become more competitive they would. It was crucial for the respondents to put forward their views and opinions as to whether the pricing of music CD’s is correctly adjusted to the Greek inflation, cost of living and the spending habits of the Greek consumer. More or less all the respondents agreed that the price levels did not correspond with any of the three categories listed above. As a result consumers are looking for lower priced products in order to satisfy their needs. Furthermore, an interviewee claimed that there are some price promotions made on CD’s but certainly not enough to make a difference.
The form of internet piracy is very popular around the world, thus the respondents where asked to comment on the issue. All respondents agreed that this form of piracy is not very popular in Greece and that it does not pose any immediate threats. The main reason for this is the fact that internet connections in Greece are pretty slow and that downloading is a very slow process that the consumers are not accustomed to. However with technological improvements taking place inside the country more users will become familiar with this form of piracy and there might be a shift towards its use. However this form of piracy does not have an immediate threat on the Greek production labels. Quality of Pirate products
The views when it came to discussing quality varied. All of the respondents agreed that there is a difference in quality between counterfeit and original products. However the difference is such that it can not be noticed by “a regular ear”. Moreover it is often the case that counterfeit CD’s are faulty and they can even damage your hi-fi system. One respondent strongly believed that the difference in quality is huge and explained it in terms of the procedures used to make the two types of products. “CD-R’s (counterfeits) are recorded with laser where as originals are recorded using a stamping
technique which has far more better quality and will last longer over time”. Furthermore he mentioned that technological advances are assisting the producers of counterfeit products to make better quality products in shorter time period.
Marketing techniques used
Mostly based around the product and the price of the product.
They need to improve the product in terms of quality of music.
If the packaging of the product improves could prove to be significant.
Lack of promotions on products, pushes consumers to purchase pirate products.
In contrast to European countries where they’re many promotions used.
The companies have moved from record stores to supermarkets and other places trying to make the products more accessible.
Communication to be adopted
The respondents where asked to comment on the approach to be used when communicating with consumers; which approach should be followed and what should be the message getting across? 1. Try to create fear of consumers towards pirates and their products? Bring out the illegal side of the matter? Sponsorship of organized crime through piracy? 2. To show that people which use pirate products should have a low image profile as opposed to people that buy original products which can be associated with prestige/class etc. 3. Should we demonstrate the difference in quality?
All the respondents feel that all three options should be adopted; they will be targeted towards different target groups. They all work well together and could attract all the target groups.
One of the respondents was asked to break down the costs of a CD Break-down of CD costing €20 •
20%-30% of price is the mark-up price from producer to the final seller.
10% AEPI of wholesale price
The Artist (depending on the Artist)
And the rest are marketing costs, etc
This concludes the analyses of the in-depth interviews. The decoding notes of each separate discussion can be found in Appendix 9.
5.2 Focus Group Interviews There where two focus group interviews that took place during the research program. Having interviewed individuals that are related to the music industry, it was necessary to examine consumers’ views on the topic of music piracy. The two groups consisted of different age groups in order to cover a larger age group. Due to the nature of focus groups the discussion was unstructured and the discussion guide used was more of a guideline than actual questions that needed to be answered. As a result the findings reported will be laid out in bullet points. HRH advice on the decoding of the focus group discussions was to record opinions expressed out in catch phrases and to use them in the
quantitative analysis. A copy of the discussion guide used during the focus groups can be found in Appendix 7. Focus Group 1 (the group consisted of 5 members all between the ages 18-23) •
All the group members usually get their music from non-legal means such as: illegal immigrants, Internet, and friends.
They don’t feel as if they are doing something illegal
They see it as a way of promoting music (especially through the internet)
They have been aware and have been using pirate products for many years now.
Nevertheless they prefer original products over counterfeits.
By using pirate products and purchasing them at very low costs a consumer has the opportunity to listen to a wider range of products and music.
Availability of pirate products is far better than originals.
Most of the members almost never visit CD stores.
They feel that the police should not go after consumers in the way that they have started doing lately.
The members were familiar with similar situations in other European countries but felt that piracy levels in Greece were much higher.
The felt that there are 3 main reasons for this difference in piracy levels: 1. No illegal immigrants on the streets selling the pirate products. 2. Better wages 3. Better price promotions on products.
All the members felt that the Greek culture assists the situation in the way that Greeks always like some form of illegality.
The difference in quality is not of great interest.
They would like to see more price promotions
Piracy helps promote music from new and upcoming artists
Somebody that is a fan of music usually wants to add 5-6 new CDs to his collection every month, something that cannot correspond with the Greek salaries.
Reductions in price would equal an improvement to the situation.
Members seemed fond of the price reduction proposed
However they want to see improvements on the product
They want the original product to offer something that the pirate cannot offer.
Pirates offer better service (distribution, availability) and are cheaper.
All three communication approaches could be used together and separately to attract attention from different target groups.
Also pass the message that purchasing pirate products is ILLEGAL
Focus Group 2 (The group consisted of 6 members all between the ages 25 and over) •
Usually supply them selves with music products from friends, immigrants, internet as well as purchasing CDs from stores.
Music quality has dropped from the past
As a result the participants claim to: only buy original CDs when quality of music is good and the product is worth keeping in their collection
Availability of both counterfeit and original products is good.
One member claimed that illegal immigrants visit his place of work on a weekly basis to sell pirate products.
“Good music kills piracy”
Technology assists the situation
Members are not aware of the illegal side of the matter.
The Mediterranean culture assists the situation
Very much aware of internet piracy and familiarity with its use
When communicating with consumers try to touch the consumers dignity
There is grate need for more marketing activities.
Both focus group discussion that took place, lasted about one hour. It was interesting to see that the group with the smaller age was much more civilized and kept to the discussion guide a lot more than the other group. The group with the older age average at times would drift off the subject and made conversations that were not related to the discussion guide or to areas of interest. It could be said that the second focus group was tame less and produced a lot less valuable information for analysis. Keeping in mind that youngsters are exposed to piracy more directly; their opinions produced a lot of useful information and addressed more opinions with relevance to the topic as can be seen above.
5.3 Questionnaires (Quantitative Research) The qualitative research was used to explore the topic of music piracy in Greece and to attain valuable information and areas of interest that needed to be underlined. Upon completion, it was evident that quantitative research on consumers would need to take place in order to cross check the findings from the qualitative research using a bigger sample. The quantitative research was carried out using questionnaires. The total number of responses was 80 and the respondents were from all over the Greek nation but mostly from Athens. The questionnaire was answered through the telephone and lasted an average of 9 minutes. Considering this the questionnaire was fairly large in content and explored many areas of interest. Listed below are the findings reported from the questionnaire. The analysis will be in the form of descriptive statistics analyzing each question separately at times whilst at others grouping questions and analyzing them as a whole to produce one meaning. Demographics:
It is best to start analyzing the questionnaires from the demographics questions in order to grasp an image of the whole sample group. It is worth mentioning that 60% of the respondents where male and that over 50% where in the age group of 17-25. This age group is the main cause of the problem of music piracy as they are most keen to use counterfeit products. Furthermore 38% of the respondents had either finished a school of higher education or were in one at the time of the interview. The second most popular occupation amongst the respondents was “higher employee”. It is also very important to note that 41% of the respondents had a monthly family income of €2-3 thousand. From this first description of the samples demographics it is evident that the majority of the respondents are well educated people, whilst the average salary incomes correspond with those of the Greek nation. General Questions: In their first question the respondents had to state their music preferences. Over 2 thirds of the respondents usually listen to either Modern Greek or electronic music. These preferences also reveal that the majority of the sample is formed from modern and hip characters. The purpose of the next question was to reveal where consumers usually listen to music and using what media. It was astonishing to find that not a single respondent listens to music from cassettes. The majority of responses stated that they listen to music from CD’s either in their car or at home (57.5%). The next most popular answer was the Radio with almost 30%. It is important that the sample was formed by individuals that use CD’s; as the topic of the research is mainly directed for those users. It is worth noting that from the sample 27.5% listen to CD’s in their cars. The next two questions were used to ascertain how long they listen to music during week days and weekends. Almost half of the sample listens between one and two hours of music everyday on weekdays and almost 40% listen between 2-3 hours of music in the weekends. These statistics indicate that the sample used is fairly acquainted to
music and most are regular listeners. It is important that our sample has characteristics like the ones listed above, because they are the target when trying to solve the problem from a marketing perspective. All questions until now where introductory and acted as a warm up discussion for the questionnaires main body. Furthermore they provide useful information as to the behaviour of the sample towards music in general. The next questions would be getting the respondent into the topic of piracy. The next two questions were concerned with CD purchase and consumption levels. A staggering 84% of the respondents purchase CD’s them selves. The majority (60%) of these CD buyers’, purchase 1-2 CD’s every month, whilst another 30% purchase 3-4 CD’s every month. These statistics indicate that the sample is not only formed by listeners but also consumers who are willing to spend money every month in order to update their collection. The aim of the next question was to reveille through which channels do the consumers purchase their CD’s. The options they were given were: stores, street sellers, Internet and Friends. They were given choice to select more than one answer mainly because respondents may feel shy or embarrassed to say they purchase their music from street sellers. By giving them the opportunity to select more than one answer they are given the chance to be more honest. Half of the sample claimed that they purchase CD’s from street sellers, whilst another 20% downloads music from the Internet. Moreover, when asked to express their opinion about which of the distribution ways listed above is the easiest to come across 62.5% claimed that street sellers are the easiest to come across in order to purchase CD’s. It is evident from these statistics a large percentage of the sample use pirate music and pirate CD’s since they either buy it from street sellers or download it. Furthermore the majority of the sample believes that the easiest channel to purchase music is a street seller, which once again shows the seriousness of the situation in Greece.
A large part of the evidence unfolded in the above questions is justified by the fact that the majority of the sample (62.5) consider price to be the most important determinant when making a choice to purchase a music product. According to this counterfeits have an obvious advantage over originals. The entire sample claimed to know what music piracy is. However two thirds thought of music piracy as a violation of intellectual property whilst the remaining one third thought of music piracy as an illegal music trade. Both answers can be considered correct but the purpose of the question was to reveille the awareness of consumers towards piracy as well as their beliefs. Furthermore consumers blame piracy on the fact that music products are overpriced. 63% believe that high street prices of music products are responsible for music piracy. It was interesting to uncover that the consumers are fully aware of the issue but do not seem bothered from the implications that come with it. Rating Questions: The next 20 questions of the questionnaire where rating questions. The description of the results will take place using the mean of the ratings as well as the standard deviation. By looking at the mean the reader can see the average of all the answers and in with that the preferences of the sample. The deviation is a statistic that tells you how tightly all the various responses are clustered around the mean in a set of data. The ratings are from 1-5, 1 being “strongly disagree” and 5 being “strongly agree”. •
Piracy levels in Greece are at high levels (mean: 3.613 deviation: 1.288)
The consumer should also be pursued by the authorities deviation: 1.476)
Piracy kills music (mean: 3.513 deviation: 1.125)
Good music kills piracy (mean: 3.488 deviation: 1.102)
Price is the main criteria in the selection between counterfeit and original music products (mean: 3.225 deviation: 1.423)
Quality is the main criteria in the selection between counterfeit and original music products (mean: 3.513 deviation: 1.147)
Access is the main criteria in the selection between counterfeit and original music products (mean: 3.800 deviation: 1.152)
The selection range is the main criteria in the selection between counterfeit and original music products (mean: 3.313 deviation: 1.121)
Price deals on music products would improve the current situation (mean: 3.788 deviation: 1.270)
There are enough price deals in stores concerning music products (mean: 2.750 deviation: 1.419)
There is a big difference in quality between counterfeit and original music products (mean: 3.450 deviation: 1.262)
I am witness to an arrest made on a consumer for the purchase of counterfeit CD’s. Next time I will think before making such a purchase (mean: 3.525 deviation: 1.222)
During the normal sales periods throughout the year, there will start to have sales on music products as well (mean: 3.800 deviation: 1.247)
The selling points of music products are many and help the consumer (mean: 3.513 deviation: 1.079)
I would purchase music products from places like supermarkets, cinemas, bars etc. (mean: 3.650 deviation: 1.313)
The sales man of pirate products should be pursued (mean: 3.900 deviation: 0.836)
Pirate products are a black market and harm the economy (mean: 3.538 deviation: 1.232)
The government looses a lot of money due to piracy (mean: 3.625 deviation: 0.986)
I believe that the phenomenon of piracy should stop (mean: 3.500 deviation: 1.273)
The final question was open ended and asked consumers what in their opinion as to what should happen in order to reduce piracy levels in Greece. The majority of answers referred to price promotions and reductions, whilst many more felt that the government could become more aggressive towards the issue and form a more strict policy. This concludes the coverage of the findings from the whole research. Having analysed all the data collected from all three phases of the research it is now necessary to come to some sound conclusions concerning the topic. The conclusions laid out in the next chapter will provide the basis for a marketing plan that can be adopted by a Greek record label (recommendations) in order to help the situation and minimise the problem.
Chapter 6: Conclusions This is the part of the dissertation where the final remarks concerning the research are made. In other words, what do the findings really mean. It is only logical that after all the research that has taken place to be able to draw towards certain conclusions concerning the issue of music piracy in Greece. Without doubt, all the resources of research will agree that piracy levels in Greece are at very high levels and that there is an evident problem. Beyond that, it is believed that there are two main reasons for the magnitude of this problem or what is more the problem has been elevated to its current status due to failures from two responsible sides. The first side; the Greek government can be held responsible for a large percentage of the problem. The government has not considered the situation with the seriousness it deserves. This has been having a negative effect both on the Greek music industry as well as the image of the country. Greece has the highest piracy levels of music in all of the E.M.U (European Monetary Union). Further more, the situation inside the country has really gotten out of hand as street sellers are flooding the streets with their merchandise. The Greek police do not go after them in the persistence that is needed in order to extinct them from the streets and as a result the Greek nation suffers from illegal activity.
The second side that has partial responsibility for the problem is the Greek record labels companies. They are to blame in the respect that instead of taking drastic measures them selves to fight the phenomenon, they prefer to sit and blame the Greek government for its lack in authority and the initiative to put an end in the situation. Similar types of firms throughout the globe are far more active to reduce piracy levels. Most of their activities come from the marketing department that tries to be constantly innovative in order to win consumers. Most of the Greek record label firms do not have Marketing departments or even the ones that do they are very poor in content and ideas. The marketing activities should be addressed using the 4 P’s. The first one ‘price’ is the most obvious as there is a very big difference in price between counterfeit and original products. However it is not really sure how much the company can work on price as an excellent point was made during the research claiming that record labels exist in a competitive environment and price reductions would be made if possible. However if that is not completely true, then the companies must try to reduce the price difference between the two kinds of products in order to become more competitive. The suggestion that prices of originals should be marked down from an average of €20 to €12.5 is very tempting but is it feasible? It was evident from the research that the counterfeit product lacks in quality from the original. However, technological advances are assisting counterfeiters produce better quality and more original looking products. The original product has the opportunity to produce something more than just in terms of quality. It is possible and also desired by consumers to receive more than just an audio CD, so more must be included in the package by the companies in term of product in order to differentiate from the counterfeit product and really make it an original. The next ‘P’ place is how counterfeit products gain most of their competitive advantage. It was evident throughout the research that street sellers are controlling the streets with extreme success. They can be found anywhere from coffee shops even at the beach. This is where the Greek government needs to take a stand and to put a stop on the
situation, not let all the immigrants free on their streets to conduct their business without any fear. The companies from their part can start moving out of record stores and into more distribution points. The research showed that consumers would be willing to purchase their music from other locations as well. Last but not least, promotion of products and the Greek music market are not accustomed with each other. There is evident lack of promotion on music products and there is lot of demand from the consumersâ€™ side to see promotions. There are endless possibilities when it comes to promotion, the record companies and the outlet stores have not been very strong on this. The research showed that the majority of the people feel that there is a lack of price promotions and that they would like to see more especially during the standard sale periods. By talking examples from other European countries, companies will discover that there numerous types of promotions they can adopt in the Greek market. It is worth mentioning that the issue of internet piracy in Greece is fairly small and that is holds no immediate threats to the industry. Moreover it is a global phenomenon and group efforts need to place in order to fight it. Internet users in Greece are small in number and the connections available do not allow for downloads to happen at the rate of other European countries. Nonetheless, there are several actions taking place globally to fight this problem and many of these could be adopted in the Greek market helping to stop the growth of Internet piracy. Further more it is important to create consumer awareness on the topic of piracy and the implication behind it. Most consumers feel that purchasing and using pirate products is not a crime and they have no regret doing it. The majority of consumers believe that they should not be punished for purchasing and using pirate products and that the only party responsible are is the sellers and the people behind them as well as the government for tolerating them. The government needs to show that piracy and all associates are not tolerated and punished.
Finally it is important that any course of action needs to take place as soon as possible. The problem has reached a point that immediate action needs to take place from both parties listed above in a joint alliance. Working together, the government and the companies stand a better chance to fight the problem. The problem can not vanish over night. It is a process that requires time and consistency from both sides and it will be a long time before any obvious results take place.
Chapter 7: Recommendations The recommendations of the thesis will come in terms of a marketing plan. The proposed plan may be adopted by a Greek record label firm in an effort to increase sales as a cause and reduce piracy levels as an effect. The plan will try to include objectives, targeting, as well as innovative ideas concerning the 4 P’s, many of which will be adopted from other European countries that are experiencing smaller piracy levels. However, due to the nature of the study, the marketing plan will be more theoretical than fact based. This is mainly because, the plan may be adopted by any record label rather that a specific plan for a certain company. Mission Statement Any Greek record labels mission with regard to piracy should be to change the current trend of consumers from purchasing counterfeit music CD’s and make evident the advantages that come with originals. Objectives •
To create awareness on consumers towards the negative side of piracy.
Make consumers aware that by using pirate products they are committing a crime.
Improve product offerings.
Introduce more promotions on the market.
Targeting, Segmentation It is obvious from the audit of the market that the primary target will be youngster from the ages of 17-25. They are they most regular listeners and users of counterfeit products. Thus they are the ones to target through marketing activities. Nonetheless, consumers of older age groups will also need to be targeted as they may have an influence on smaller age groups. Furthermore, targeting children of a younger age group than 18 may stop them from purchasing counterfeit CD’s in the future. Marketing Mix The marketing mix will outline several activities that may be adopted by a record label in line with the objectives set out above. Price: A suggestion on price promotions has been adopted from a similar market. The video games market and more specifically Sony Play Station games. Sony has a policy that when a title game of theirs reaches a certain amount of sales it becomes platinum. Once a game is platinum it is reduced to half price. Music record firms also have the same procedure of making records either gold or platinum according to the number of sales they have made. In that respect a Greek record label may adopt the same policy Sony has. For example if a record costs €20 and sells 50 thousand copies it becomes gold. By becoming gold the record may then be sold for the price of €15. Once the record breaks the 100 thousand mark in sales it then becomes platinum and may then be sold for €12.5. Not knowing the margins with which record labels work with it is impossible to make accurate suggestions to reduce prices. However the suggestion above is only a rough idea and with the necessary alterations it could produce sound results in terms of sale units.
Product: Through one of the focus group discussions many ideas where expressed as how products may be improved. Having the lyrics of the songs inside the leaflet seems pretty poor these days and there is need to be creative in terms of product offerings. One suggestion was to include a DVD of the artist in a live show. The idea makes the product look very appealing. Furthermore the purchase of such a product is likely to shift consumer attitudes towards the difference in quality between counterfeit products and originals. A record label could employ this idea with several of the artists that it works with. The artists would be keen with this idea as they would receive better exposure and better recognition as artist. Moreover together with the purchase of a music album, the customer may receive the chance to receive “freebies” or enter competitions. The extra gifts may be t-shirts with the artist or the whole band etc. The competitions may allow customers to win ticket concerts with backstage passes to meet the artists. The next suggestion that is put forward came whilst reading an article about ebay. E-bay is proposing to start selling custom made compilations for customers. The customer may order a specific play list from the internet and custom CD’s will be made according to ones preferences. Similarly record labels could adopt the same system and allow consumers to compile CD’s from their available lists of songs and artists. This could take place over the internet through the company web site as in the case of e-bay. Place: Research showed that customers would be willing to purchase music products from alternate places other than music stores. The Greek record labels have capitalised on this and have started moving towards super markets and other places where consumers are more likely to visit on an everyday basis. There are no suggestions as to any new places that music products may be sold. Promotions: It is evident that there is a lack of promotions in the market. It is often the case in other European countries that very attractive promotions will be made on music products. Many times in the sense of buy 2 get one free (from a specific range of
products) or similarly purchase 3 for a certain amount of money. These promotions are fairly straight forward and little if any adjustments need to be made in order to be imported on the Greek market. The record company may ask outlets to group there products on a stand and have the promotion on their products alone. All of the ideas expressed above are in their development stages and modifications will need to happen in order for the record labels to use them in Greek market. Communication Message to be Adopted As mentioned before throughout the research information was received as to what approach should be followed when communicating with consumers. Currently there is a group effort from Greek record labels, IFPI and the government to convey a message. The message is â€œPIRACY KILLS MUSICâ€? and uses the following logo. The message/slogan has managed to receive a lot of publicity but has had no effect on consumers and their habits towards piracy. As a result it is evident that a new campaign is in desperate need to produce more sound results. The tree approaches that have been suggested are: 1. Try to create fear of consumers towards pirates and their products. Bring out the illegal side of the matter. Sponsorship of organized crime through piracy. 2. To show that people which use pirate products should have a low image profile as opposed to people that buy original products which can be associated with prestige/class etc. 3. Should we demonstrate the difference in quality between counterfeit and originals. Research showed that all three approaches should be used for different age/target groups. However having identified the primary target group it is suggested that the second option is the best way to go with. The reason for this is that the Greek culture has
certain characteristics that would be influenced by such a message and the communication would be more successful.
7.1 Suggestions for further research This research was only introductory to the topic. It examined piracy in terms of consumer behaviour and also marketing as a tool to fight piracy. The suggestions made towards record label firms are very broad and there is need for development and a much better adaptation on the Greek market. Record label firms are advised to research further on the topic and more specifically on the marketing activities they ought to conduct.
7.2 Limitations The main limitation when conducting the research was the lack of funds. A research that is well funded may examine the views of more consumers and attain more accurate results. Nonetheless the research carried out maintained high levels of professionalism. Furthermore the research was carried out by an individual and at times work load was too much to handle.
A few final words The selection of the topic of music piracy in Greece was made on the basis that music piracy in Greece has reached very high levels. In that respect it is felt that marketing could partially be the solution to the problem. It is strongly believed that that the issue on music piracy in Greece is a very serious problem. However the problem is not treated with the seriousness deserved. At first from the governments perspective and secondly by the Greek record labels and their behaviour towards the problem. Having deeply examined the issue, facts and information are convincing that there is more that can be done from both sides. That which remains is for them to start taking some measures to fight this phenomenon. Music piracy in Greece can really be considered a phenomenon. The future for Greek music label firms does not look very promising. It is believed that it is not too late for the situation to turn around but there is immediate need for measures to start taking place.
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Published on Nov 20, 2004
In this study the phenomenon of music piracy in Greece is discussed. An empirical study is carried out using primary and secondary research....