Apple, Which Controls Over 75 Percent of Digital Music Sales

question 5

Multiple Choice

Apple, which controls over 75 percent of digital music sales, was able to dictate song pricing for years, despite the tremendous protests of the record labels. This implies that:

• A) despite the presence of network effects, the music industry is not dominated by any single leader.
• B) the presence of multiple new entrants forces leading firms to drop prices of their offerings.
• C) firms with strong market dominance can enjoy substantial bargaining power over partners.
• D) a dominant market share does not necessarily translate to greater profitability for a firm.
• E) there were cross-side network effects between the various music labels.

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Definitions:

Marketing Messages

Marketing communications that guide prospective customers through the buying journey without pressuring them for an instant choice.

Conversation Marketing

Approach in which companies initiate and facilitate conversations in a networked community of customers, journalists, bloggers, and other interested parties.

Social Media

Online platforms and technologies that enable users to create, share content, and participate in social networking.

Persuasive Claim

A persuasive claim is a statement or argument designed to convince the audience of a specific point, often used in marketing, legal arguments, and debates.