S

Submitted to:
Dr.Amber Gul Rashid
MKT656-Services
Marketing

LADY GAGA
Written Analysis of the Case

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 Executive Summary:
The case takes the example of Lady Gaga, an emergent and popular music artist, to explain the
readers about the basic points that one can adopt to market the brand, its promotion and above all
to make it a success. The strategies that one can use to leverage his/her name and the usage of
correct tactics to make something a success in terms of marketing. The passion to excel in the
field of music, her natural talent, sense of fashion designs and uniqueness, all were the
characteristics that Gaga possess and that made her career a success.

There were indeed some issues that this pop star was facing in her early career and in the current
scenario as well. Her manager, Carter and other peers that helped her a lot during her career, all
are endeavoring to get her at the top of fame by making an extremely important decision that
whether to organize the tour or take some other decisions. The decision becomes a bottle neck
when a famous artist, Kanye West, backed out from the tour that is going to take gaga to the peak
of fame. The investment, the costs associated to the tour, the arrangements, the hype etc. All
would be lost if that tour fails.

The case present three alternatives available to the Gagas manager Carter out of which he has to
decide that what action he should take so that the brand name of this artist remains safe and the
loss is minimal. For that we suggest that he should take the decision to go to the tour to bear the
costs incurred so far and also the brand name of Gaga is now well enough to make this tour a
success.

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 INTRODUCTION:
This case is written about the success story of an
extremely popular pop icon Lady Gaga, who conquered
the world of music both recorded and the live music
through her vigilant sense of participation and also the
peers she got. The case describes the journey of this artist
and the issues she faced in her initial career. The way she
fought with them with her sole determination and
desperation, the role of other peoples in her career etc. etc.
Her methodology included the usage of social media
networking which she used proactively and her active
participation to listen and to reply to her fans that there is
someone who speaks to them. Also she won lots of awards that clearly speak a lot about her
innate talent and consumer choice to listen her more and more.

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 KEY ISSUES:
Gaga has been a successful music icon for more than 3 years but her success is not just
attributed to her own talents but the way whole team marketed her in front of the
audience to gain their support. Gaga when initially entered this market formally, was hit
by a major setback where her first contract was made with Def Jam Recordings and was
rejected by the company three months later. After she joined Herbert and Carter, the
company had issue with marketing her first single song on the radio. Major radio stations
were not willing to play that song because it was too much of a dance song and that Gaga
was not much famous in terms of fan base at that time. After Gaga gained support of
some fan base through social media and small shows, the hurdle was to market Gaga to
the main stream audience in order to create a better brand. The company was not even
making much money out of the sales of the show tickets because Gaga was too much
committed to give her fans a worthwhile experience which cost them dollars.
Gaga and the team were already for their next big move to reach the mass audience in
collaboration with Kanye. Unfortunately, during the MTVs Video Music Awards
(VMA), Kanye produced a stunt on stage by grabbing the microphone from Taylor Swift
who won an award, and telling the audience that Beyonc deserved the award. This thing
shocked everyone including his own fan base. A lot of controversy was created and
Kanye later withdrew his name from the upcoming tour which was planned with Gaga.
By doing this, brand image of Kanye was at stake and thus major repercussions can be
faced by Gaga regarding the upcoming tour and $ 4 million of Gaga is at stake.
She was already facing financial challenges, as she quoted I have gone bankrupt about
four times now. My manager wants to shoot me, every dollar I earn goes to show
Recorded music industry was also facing new challenges, as emerging trend of digital
music shifting music retailer to accommodate less shelf space to music. For recording
label is use by artist, label deduct wide cost from artist royalties including related to
recording album, producing video covering tours and radio promotion and most artist
never recouped their advances they only received share of sales. Gaga was using label of
Stream Line Records a subsidiary of Universal. Therefore she was not getting much from
this side too.
Lady Gaga has signed agent William Morris Endeavour, who were receiving percentage
of gaga gross profit in return of his services. In case of withdrawing from the tour, Carter

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 has to consider implication for Gagas Partner in the venture, including promoter and
WME agency.
Carters job was also in risk as being a manager lady Gaga trusts all of his decision.

AVAILABLE ALTERNATIVES:
The case has given three alternatives that Carter faces at this moment, he could either go ahead
with the concert with Lady Gaga alone, or he could develop a theatre tour and adjust the costs
accordingly and the last option was that he could flat out cancel the concert and save lots of cost
involved.

Alternative 1 (Go ahead solely):-

Even though the VMA was a disaster for West, it gave much publicity to Lady Gaga and
similarly generated much interest in her upcoming tour. The team could capitalize on this buzz
and use viral marketing for creating a sales generation and make the tour successful. This would
involve 25 arena tours with average seating capacity of 16,000 to 20,000 seats, with price of each
ticket being in between $100 and $150. This would be big financial gamble, but it could lead
Lady Gaga brand to be firmly established with a wider loyal fan base.

Alternative 2 (Proceed with a small theater):-

In order to decrease the financial risks they could develop smaller schedule for smaller venues,
but that would decrease the financial rewards as well. The seating capacity would vary with
maximum 8,000 per theater and pricing the tickets in between $70-$110. Another challenge the
team would face is redesigning a smaller tour in a matter of weeks. If we take a look at her
previous experience, one month circuit called Fame Ball did involve small venues and was not
that much profitable. Having said of the economical side, if she proceeds ahead it would also
strengthen her brand as reliable and grow her fan base through which the team could benefit
later.

Alternative 3 (Cancel the tour):-

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If the team chooses to cancel the tour they would risk the prospect that Lady Gagas star might
fade away without a tour guiding it. But on the other hand they could prevent losses beyond $4
million already spent on Fame Kills. The tour choice was a crucial decision for Lady Gagas
team because concerts not only provide a great publicity tool but they are also a great source of
income. As income was decreasing from recorded music, revenues from concerts were steadily
rising

ANALYSIS OF ALTERNATIVES:

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 Pros
OPTION I
Commitment is very important in
every business and she committed
to her fans so she will improve her
popularity with continuing the
arena tour
She will gain confidence
performing alone and will take her
brand to next level
If she goes on with her plans and it
works than she will overcome all
the losses incurred
Her fan base will increase if she
goes on with this plan since she is
now more popular after MTV
awards ceremony
Big risks brings big rewards
OPTION II
With this option she will meet her
fans expectations to a certain
degree and will increase her
popularity
She won't be putting 12 Million in
this tour so its less risky.
Even if turn-up is not high her
events can be a success
OPTION III
No financial Risk
She could reschedule the tour and
meet the expectations of fans with a
bigger and better tour in future
RECOMMENDATIONS:
Lady Gaga (Written Analysis of Case)
Cons
If she performed with West than
west's fan base would raise her fan
base and going alone is a risk and if
audience strength is not there than
she will lose her image
She planned to perform songs with
west and without west she cannot
perform those titles
Being new in this industry it's a big
risk to go alone all along one bad
performance in her tour could ruin
her image
It's a big risk putting all 12Million
in the tour
She is a risk taker and this option
doesn't suits her personality
Her brand cannot go to next level
which was the purpose of this tour
Less risks less returns
Lesser marketing with lower budget
and coverage
Fans would be disappointed if they
cannot attend her concerts due to
lack of capacity
Decision doesn't suits her
personality
She will disappoint her fans
She will lose on confidence
No Risk no Reward
Fans would think she is depending
on others and will associate with
West's image
No solution to her financial
problems
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We suggest that Lady Gaga should go with alternative one that is to continue with the solo arena
tour. She already had spent $4 million US in her tour as a sunk cost and now her manager needs
to recover all financials. VMA was great event for Gaga, it gave high publicity to her, she already
had catered large fan base through her social media marketing. Going on tour can help Gaga to
gain confidence of standalone performance, her fans were eager to see her performing live on
stage. Moreover, as she planned to continue with tour they need to spent $12000000 as startup
cost as given in Exhibit 10; but if we further analyze it we can find out each arena has average
capacity of 16000 to 20000 seats with an average ticket price of $100 to $150. If she go for 25
concert, Lady Gaga can earn about $75000000 that is almost the thrice of the startup cost. By
this option she can prove herself that she is committed to her fan base and she will able to
overcome all the losses incurred.

On the other hand, if we go for option two that is for small theatre it will reduce the cost but
there is a risk of rush which will have negative impact her brand image. Therefore, it is better to
go with option one which is true in respect of high contact services that is Gaga will able to
meet her fans throughout her tour.

By continue with solo arena tour she will able to satisfy 8 Ps of services. She will able to cater
large amphitheaters for her performance and songs. It will satisfy product and place of services.
Price of ticket also fit with the physical facilities or virtual environment of the theater. Promotion
will be increased by word of mouth as more fans will be accommodating in 20000 seats Capacity
Theater.

GAGAs SERVICES IN LIGHT OF FLOWER MODEL:

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 Core: Arenas and Amphitheaters are the core of the services

CONCLUSION:
In the light of above analysis of the case we can say that by adopting some good marketing
strategies with a combination of aggression and some talents surely gives a brand a success. The
timing and nature of the strategies must be coherent and consistent with the main objective and
strategy.

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