Cheap MP3 Players or Costly MP3: Which is which?

One problem that MP3 manufacturers face in this highly competitive music player business is that the MP3 designs are relatively easy to duplicate. For this reason, MP3 players are getting smaller and smaller so their features naturally get simpler and simpler. But again, competitors and brand pirates could easy copy and reproduce players. To survive the onslaught of cheaper versions of their designs (from the manufacturers of cheap MP3 players), manufacturers of the higher end MP3 players have to turn to contract manufacturing to avoid being swamped by big players like Apple and Sony.

Contract manufacturing is a business model used in many industries and is now applicable in MP3 manufacturing. It works when the MP3 player manufacturer selects a manufacturing company that has the resources to make MP3 players for the client company in the most cost-effective manner. The MP3 player manufacturer chooses a manufacturing company based on factors such as labor, manufacturing processes to be used, material costs and tooling which in the final analysis will all influence pricing of the MP3 players to be produced. Manufacturers of MP3 players resort to contract manufacturing because it is often a more viable way to mass produce MP3 players (especially the cheap MP3 players) because they need not worry about how to maintain factories of their own. The manufacturing company they contact will worry about sustaining factories while the manufacturers of MP3 players just worry mostly about keeping product standards on par with what they desired and what consumers actually want.

However, contract manufacturing alone would not guarantee the survival of MP3 players in a highly competitive market. There are other tactics that an MP3 player manufacturer resorts to in order for the company to remain competitive and not be subdued by the bigger players.

For one, the MP3 players’ manufacturer has to make sure his/her products are different from those offered by competitors. This is called product differentiation. Another tactic is for the MP3 players to meet consumer demands when it comes to ease of music transfer, form factor, battery life, and pricing of the product (which is one aspect that cheap MP3 players have the upper hand.) A third tactic is for the manufacturer to identify definite distribution channels by which the MP3 players could be distributed at a cheaper but is focused on maximum effectiveness.

Understand that marketing is a big determinant of what brand of MP3 players a consumer will buy. A superlative product that has been poorly marketed stands little chance of surviving and will probably be relegated to the shelves of oblivion. A so-so product that has been marketed well will probably survive much longer. Marketing is one reason why the Apple iPod experienced such great demand and why it is likely that future products from Apple will be met with just as much enthusiasm as the original iPod did, upon its introduction to the market.

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