Best Practices Study of Museum
CD-ROM Production

7. Marketing, Distribution and Sales

7.1 Overview of Practices
7.2 Critical Success Factors for Marketing, Distribution and Sales

7.1 Overview of Practices

In all the cases examined, the commercial partners handled the distribution, marketing and sales, instead of the museum. Often the multimedia partner was responsible for finding publishers, who in turn worked with distributors.

Most museums indicated that they had the most difficulty with marketing issues. The museums often had little idea of the progress of their CD-ROM sales. Interestingly, publishers and distributors also struggle with marketing issues, and all parties learn in the marketplace.

Defining the Target Market

As noted, the importance of defining the target market is critical and this must be done as clearly as possible. The CD-ROM subject must be matched to the target market. The museum should consider this with the following information in mind:

• According to the CMC, which has developed high quality CD-ROM products, the multimedia audience ideally must be an international one, since the Canadian market may be too small for more costly products. The topics should be broad enough to have generic appeal to other countries (e.g., Inuit) or specifically designed to fill a niche in the Canadian market (e.g., Native Images of Canada, or Stampville). The CMC emphasizes the importance of identifying the target market clearly and insists that a general audience does not exist.
• In designing for a French and English audience, it is important to recognize the cultural nuances and context of each market. A good translation is unlikely to be sufficient to develop a market in another language. The cultural context may require a change in the packaging design, the text and the writing style to reflect the cultural differences. For example, French versions are written in a more descriptive style to appeal to the French audience.
• When the museum assesses a possible CD-ROM topic, it should try to determine the answers to certain questions. What are the main assets of its collection? Who is most interested in these collections? Which specialists are most interested in the collection? Who is writing well about the collections? Who else can add value to the product?
• In developing new CD-ROMs, the museum should develop material around themes which are broadly accessible to other cultures. Such themes include, for example, the basics of life, stories about courtship, marriage, family, animals, etc. It may be necessary to create new images or to purchase the rights to other images if this can improve the final product.
• The Pocket Museum is an example in which CMC chose to design for children aged six and above. They wanted to create a product that would allow parents to spend time with their children as they worked with the product. The product development focused on families with young children as the target market, and the product was developed very differently than if, for example, teenagers had been the focus. The same approach to each product and its development will not work if the target markets are different. For example, CMC is developing Inuit for an adult audience, and it is marketing this CD-ROM differently than it marketed Pocket Museum.
• Most museums interviewed believed that their products had the most appeal to the educational segment of the market, and not to the home segment. Some had designed lesson plans and instructional aids for the CD-ROM product to make the product more attractive to the educational market. Some had conducted focus groups and brainstorming sessions with students and teachers at key points during the development process.
• Museum-produced CD-ROMs are not exclusively targeted towards the educational sector. OMSI believes approximately 80% to 90% of the market for Dinosaur Safari is the home segment. The product is oriented more towards entertainment and games than on educational values.
• Several CD-ROMs produced by Quebec museums have had more success in France than in the US. This is mainly due to the subject matter, which may have more historical and cultural relevance to a French audience. American consumers are reportedly interested in showier productions with less descriptive content than European audiences are. American consumers are reportedly not interested in a product unless it features a high-profile American theme. For example, the Balloon Age CD-ROM does not sell well in the US because it does not include a well-known American historical personality involved in ballooning.
• Sales of Canadian produced CD-ROMs through museum gift shops are usually relatively low. The Smithsonian achieves approximately 20% of its CD-ROM sales through museum gift shop sales.
• The shelf life of CD-ROMs produced by museums as reference material is reported to be about 4 to 5 years. The shelf life of most entertainment CD-ROMs is shorter, between 2 and 3 years. The payback calculations for CD-ROM development must therefore take this life cycle into account.

Choosing Marketing Partners

Most museums rely on their multimedia partners to find publishers, who in turn have contacts with distributors. In this respect, the link between the museum and the distribution channels is a tenuous one. Usually, the commercial developer has publishers and distributors with which it works. In many cases, the museums have not been involved in selecting a publisher. An exception is McMichael, which is currently in negotiation with publishers in the education field. CMC's experience with distributors is interesting and typical of the difficulties museums have in finding distribution channels. The following points describe this experience:

• CMC spends most of its efforts working with its development partners and usually begins to consider distribution issues after it has started the project, rather than at the beginning. CMC believes it must begin to find distribution partners at the conceptual and business planning stage. CMC would like to improve its search for distributors, particularly to enhance the promotion of its product internationally. The use of distribution partners must also be connected to the audience that the museum is trying to attract.
• The museum will find it useful to leverage the marketing efforts of the other partners. For example, CMC is spending $15 000 to $25 000 in marketing resources for each CD-ROM in each of two languages. These resources are combined with the actions and resources of the various partners to achieve maximum visibility for its products. As a result, the high profile of Pocket Museum in print and electronic media in Quebec has been quite exceptional and unique in the short history of multimedia in Canada. This is a result of the efforts of the multimedia partner, PTM, and their dynamic leader Louise Guay who is seen as a multimedia star in Quebec and Canada
• CMC believes it should begin to focus more on working with private partners who can help with financing and bring a proven distribution record to the partnership. One of CMC's current products under development is Inuit, which has generated so much interest from several European countries that the CD-ROM was displayed at the Frankfurt book and multimedia fair, the largest book fair in the world.
• In their search for international distribution, the CMC is interested now in obtaining written commitments from distributors with proven international distribution records and a solid presence at international book and multimedia fairs.

Price Points

• Usually, museums rely on publishers to assist them in determining prices for their products. Most high quality interactive CD-ROMs are priced between $30 to $50 and are positioned to be competitive with other CD-ROM products.
• CMC believes that the content value of Pocket Museum is worth approximately $70. The product is priced at $39.95 because it is believed to be a more attractive price point for marketing to children.
• CMC has priced its Inuit CD-ROM at $50, because it is targeted towards adults and it is believed to be a reference product.
• CMC's Totem Poles is priced as follows:

• Prices for CD-ROM products decline with the passage of time and they can be quite low at the end of the product life cycle. For example, OMSI's Dinosaur Safari originally retailed for $60 US and is now available on the Internet for $12.99.
• High quality interactive CD-ROM products were priced around $39.95 for the Christmas market in previous years.
• Museums review prices of comparable products to price their own products.

7.2 Critical Success Factors for Marketing, Distribution and Sales

Critical Success Factors for Marketing, Distribution and Sales

• Develop a marketing plan as part of your business plan.
• Be as clear as possible in defining the target market and in positioning your product in that market.
• Develop a clear statement of the opportunity, outlining why your CD-ROM is necessary in the marketplace, or what needs you will fulfill with it.
• Describe the unique features and benefits of your product.
• Determine whether there may be opportunities to develop new types of products by working with other museums or other types of partners.
• Consider how you might extend the product life by the addition of follow-up version, product enhancements, or hybrid linkages to the Internet.
• Visualize your collection as an asset that can be managed and leveraged through the CD-ROM.
• Define the target market and key market segments for your products.
• Consider using brainstorming or focus groups of potential consumers at key points in the development process to test the concept or prototype, particularly when targeting the educational market.
• Research curricula when marketing to the educational market and design your product to enhance curriculum content.
• Include teaching guides such as lesson plans and tests in the CD-ROM product developed for the education market to determine absorption rates, etc.
• Consider using a hyperlink to an Internet site to keep the content and the teaching guides current and to provide a mechanism to obtain consumer feedback.
• Consider working with various educational publishers to penetrate the education market if appropriate.
• Conduct reference checks on possible marketing partners to determine their ability to conduct similar work.
• If the project has an Internet component, determine who will manage it and how it will be financed.
• Define the normal marketing channels and the possible untapped channels.
• Determine whether the use of the Internet or catalogue sales can help you market your product.
• Consider adding game features to your product to give it more appeal to the home segment.
• Leverage the resources of the other partners in your communications and marketing programs.
• Conduct a break-even or return on investment (ROI) analysis for different price points and volumes, and incorporate it in your business plan.
• Conduct a sensitivity analysis by changing the critical variables by 10% and determine the impacts on your bottom line to isolate the critical variables.
• Clarify and define how after-sales support, customer service and replacements will be handled.