Mt. Hood Records will target two primary market segments, record stores and consumers at live shows. These will be the sources of income so they will be the main targets. Initially, Mt. Hood Records focus will be to develop visibility within the community, enough to be able to sign up bands which are the key to revenue generation. The need to sign up bands will drive the marketing activities that Mt. Hood Records will undertake in order to generate revenue in the future.
Mt. Hood Records has identified two target market segments which will be the main targeted customers.
Mt. Hood Records has chosen these two distinct market segments because they are the main source of revenue. Mt. Hood Records will remain focused on their important marketing activities aimed at developing visibility for the record label, however, ultimately it comes down to CD sales for business viability and the record stores and consumers at live performances being the source of this revenue. This is a fairly intimate industry, most of the industry participants within a region know each other. Keeping this in mind, networking will be the most efficient and effective activity. The only way to get into record stores is by showing potential record sales. The way you begin to do this is to have good contacts within the stores to get the right people to listen to you.
Another source of revenue will be the buy out of a band from their Mt. Hood contract in favor of a larger, national label. These events will not be marketed for, they will tend to occur on their own. This source of revenue is, however, tracked in the sales forecasts.
In general, the record industry, at least when based on overall sales, is a highly concentrated national industry. There are several huge international corporations that control the bulk of record sales. For bands looking to break through into national stardom and significant record sales, this is the distribution/promotion channel that they must concentrate on.
There are also the "Indie" labels which are broader than regional companies, but do not have the same breadth as a national player. The Indie labels can be quite large, they just tend to do business in less commercial ways. Many Indie labels can support national acts who are professional musicians.
The last segment of the market are local record labels who typically support musicians who are not professional in the sense that they typically have day jobs that occupy their time in addition to the musical interests. Most of the regional labels must concentrate on a region that encompasses at least one state, often two or more. There are very few labels that will only concentrate on a specific city such as Mt. Hood Records in Portland, it is often too difficult to concentrate on such a small audience. It is certainly a viable business model, you just need to be strategically focused to pull it off.