Marketing Strategies - Krista Jackson



Marketing StrategiesKrista Jackson AET/552November 30, 2015Dr. Dennis MorrowAbstractThis paper examines three streaming digital music websites and apps for their marketing strategies. Spotify, Pandora, and iHeartRadio are analyzed on their segmentation, differentiation, and positioning in marketing strategies of these organizations. They are each carefully explored in each section of marketing. Spotify, Pandora, and iHeartRadio each has their own value proposition that is examined in the paper. Their websites are the main focus on value propositions because their websites are the main source of interacting with these three organizations. The paper identifies if each organization is meeting customer expectations, and what makes each of them successful in meeting expectations of their customers. Lastly, the paper includes if each organization delivered their promise to their customers because this leads to success in organizations. The customers need to feel that their expectations were met, and the promise they were given was gained. Keywords: customer expectations, differentiation, iHeartRadio, promise, Pandora, positioning, segmentation, Spotify, value propositionMarketing StrategiesThe streaming digital music industry has been growing over the past few years, and now more companies are seeing the benefit and market for streaming digital music. Three competing organizations are Pandora, Spotify, and iHeart Radio. They have been streaming digital music for users for a few years, and they have all been successful in their venture. Technology keeps growing, so people will want access to music, and they will prefer one place over another. Their marketing strategies will always be a big factor in how their potential and current customer’s view them and their organization’s service. Segmentation, Differentiation, and PositioningSpotifySegmentation. Segmentation with Spotify and all streaming digital music uses demographics as their main segment. Demographically age is the big determining factor in how they market to their consumers. Spotify's users are younger individuals looking to listen to music on an electronic device. The company advertises to the younger generation because of the statistics. They added a feature, which most streaming digital music companies do not add, and it is the idea of the lifestyle segmentation. They have different categories for different occasions, for instance, workout, relaxation, focus and traveling are a few examples. They do not just focus on only genres or artists. Their usage level is a major segment because that is how they compete with other competitors. They need consumers to use their streaming digital music technology more than other competitors to be successful. The benefits sought out for segmentation would be for people who want to listen to music with easy access. The consumers can listen to genres, specific artists, albums, or artist stations. Spotify has the benefit sought for specific artists and albums that other streaming digital music sites do not have yet. If others do not follow, then Spotify will be a major competitor in this music industry market. Differentiation. Differentiation with Spotify focuses on both undifferentiated and differentiated strategies for their target market. Spotify uses more of an undifferentiated strategy for consumers that listen to their music. Their marketing message on their website homepage is, “Music for Everyone.” (Spotify, 2015). They want to reach everyone in the market with their message, and the different lifestyle choices they can pick for stations even caters to older adults. They do use many different marketing strategies, but they are all directed towards everyone. The age range of 13-44 is the biggest segment in percentages, and the main audience segments they are marketing to are all on some social media site (eMarketer Inc., 2015). They use differentiated marketing with brands to promote their music, and for Spotify to promote their brands. They have a whole page dedicated to how to use Spotify’s statistics and targeting for the brand’s specifications (Spotify for Brands, 2015). The idea of having a whole page on their website dedicated to helping to promote their website, and helping others promote their brand or website is something new. Positioning. Positioning for Spotify focuses on all of the positioning strategies successfully. The main positioning strategy they should focus on that can be detrimental is price and quality. The price and quality positioning strategy is what is keeping them from getting bigger. Price and quality are a big reason many consumers do not even try Spotify. They used to only have a seven-day free premium trial. After the trial, the consumer could only listen to the free version, which was frustrating to consumers. Right now they are advertising a $0.99 a month for first three months, and then consumers pay $9.99 a month after (Spotify, 2015). They realized the seven-day premium trial was not working, and anyone who tried the digital music had the same reactions. The positioning move they are making could help their sales tremendously.PandoraSegmentation. Segmentation for Pandora, like all digital streaming music, uses demographics of age as the main segment for marketing strategies. For streaming digital music the consumer’s age is the most important demographic. The ages 18 to 54 are their major target market for segmentation for Pandora (eMarketer Inc., 2015). Pandora is trying to reach all ages to listen to their music, and they have become one of the most successful streaming of digital music. Lifestyle with Pandora is different because they are more focused on stations and service than the lifestyle of the listener. There will always be a market for streaming digital music, so they have not seemed as concerned with the aspect of lifestyle in segmentation. Usage level is the major influence of segmentation for streaming digital music, and Pandora has the numbers for usage level. They are the highest ranked right now, but they have been around for a while, and people are used to the app. Pandora must keep their usage level up to stay as successful as they are right now. The benefits sought out are consumers looking for easy access to just stations to listen to music. There is not a way to play an individual artist, so the consumer must want the benefit of only stations.Differentiation. Differentiation with Pandora focuses on targeting consumers with undifferentiated strategies. They want to focus on everyone as equals and deliver the same message to all consumers and possible consumers. Pandora's message on their homepage is, "It's a new kind of radio – stations that play only music you like" (Pandora, 2015). They are wrong with this fact because they have not gotten any better even with their new "technology". They are delivering the same message to everyone with no photos, or anything interactive on their website. So far this has not affected their competition in any way, but in the end, it seems they may have to change some marketing features to keep up with new digital streaming music. They do focus on a differentiated strategy with marketing to people for ads with specific messages for different segments (Pandora Advertising, 2015). The page is focused on advertising other ads, and it is not for getting their streaming digital music out there. Everyone pretty much knows the name Pandora now for streaming digital music. Positioning. Positioning for Pandora focuses more on prices and quality trying to make the consumer seem like they have the better deal without saying they are better than their competition. Pandora is free, but it does not come with all the features if you pay, just like their competitors Spotify. They offer “Pandora One” at $4.99 a month (Pandora One, 2015), but it comes with less freedom than you get with Spotify. The consumers with Pandora One still get a limit on skipping songs and they still have timeouts, unlike some competitors. Pandora's other positioning factor would be their competitors, but for now, they are the top number one streaming digital music media site. Pandora will have to deal with the competition strategy in the future because of their limits that competitors do not have with their sites. iHeartRadioSegmentation. Segmentation with iHeartRadio, along with the other streaming digital music, deals with demographics as the main segment. When dealing with demographics with segmentation in this industry age is the specific factor that is looked at for information. iHeartRadio has a demographic of ages 18 to 44 as their main users of their site (, 2015). Their marketing and website are more segmented for the younger generations, so they use photos and interactive material for the younger individuals. Lifestyle is more open to all age groups with all of the options the consumers have with iHeartRadio. They have genres, artist stations, podcasts, and live radio stations to listen to on their site (iHeartMedia Inc., 2015). Usage level is still the biggest determinant with who is reaching success. They have a broad range of users because of their two different lifestyle options, but Pandora still leads the way with streaming digital music. The benefits sought out by consumers are the streaming digital music, but the other two options that the other two do not offer. If consumers want the benefits of listening to live radio and podcasts, then this is the site for them to choose. iHeartRadio has an advantage over this segment that other sites still have yet to add onto their site. Differentiation. Differentiation with iHeartRadio deals with differentiated strategies to reach their consumers. They have different options that other streaming digital music sites do not have, so they can target this untapped market, and use it to their advantage while marketing to consumers. One of the first strategies you notice is in the name because it can be interpreted in many ways, but it has the word “radio” in the title. The word radio shows consumers that the site is not just streaming music, but it is also for those consumers who like to listen to the radio. They target different segments by the different options they have for listeners, and the live radio and podcasts give them a market other sites do not have yet. They can target radio and podcast listeners with different messages, as well as the consumers who like to listen to just streaming music. iHeartRadio has an advantage that the other two listed do not have, and they could become successful with the right marketing for their product. Positioning. Positioning in iHeartRadio has two main strategies they focus on with their site. One is the benefit of using the site, and two is the price and quality of using their site. The benefit of using the site is that everything is free, and the whole site is free of ads (iHeartMedia Inc., 2015), which both of the sites listed do not have this option unless you pay them money. It is uncommon for consumers to even mention iHeartRadio, and it is surprising finding out what all they offer as benefits. The second of course is pricing and quality, which there is no price to use this site, and no ads go along with iHeartRadio. They have the upper hand in this market, and they should use these positioning strategies more in their marketing to become more of a success. Value Proposition The value proposition can be defined in many different ways. A "value proposition—i.e., its primary benefit or how it can solve the consumer’s problem.” (Shrimp & Andrews, 2010, p. 268). Laya (2015) says that the value proposition should have relevancy, quantified value, and unique differentiation; then the value proposition should be clearly on the first page of the website for marketing. The latter seems surprisingly difficult for some of these organizations; when they solely rely on their websites. SpotifySpotify has a nice homepage for their website explaining their value proposition. Their relevancy and quantified value are the first objectives you see when you click on their website. They mention how they are having a sale for three months on the premium right now, and then there are three other slides when you use the arrows. They have a family and student discounts advertised for quantified value. When you scroll down the homepage, their value proposition is, “Music for everyone. All the music you’ll ever need is right here. Your favorite artists, albums, and readymade playlists for every moment.” (Spotify, 2015). Lastly, they list the comparison charts of the free and premium versions. The value proposition statement and the comparison charts show the unique differentiation on how Spotify identifies them. Spotify has a unique long homepage utilizing photographs, text, value proposition statement, benefits, discounts, and the comparison charts on their prices. PandoraPandora has an odd website on showing their value proposition. The Pandora homepage is pretty bland on explaining what all they offer, and what they do have on their homepage does not tell a lot about their product. “We created Pandora to put the Music Genome Project in your hands. It’s a new kind of radio—stations that play only music you like.” (Pandora, 2015). Then there is a bar to type in music or an artist name. The homepage does not tell you anything except for its relevancy and one unique differentiation. If you look up the Pandora One homepage, then you will see that they have more information than the regular homepage. There is not even a place to click to Pandora One on Pandora's homepage. "Listen to music you love ad free, with more skips, with fewer timeouts." (Pandora One, 2015). Then they list the price for the product or an option for an annual plan. Lastly, they list the pros of using their radio with a few more small advantages, and they also call themselves, "the best personalized radio” (Pandora One, 2015). Pandora One has relevancy, quantified value, and unique differentiation on their homepage. They use the same background as the original website with no photos. It does not explain the product very well on the main homepage, and the customer has no idea that they can upgrade. The web page does not seem well thought out, but they have had customers since the beginning, so word of mouth is the only reason I could see someone picking Pandora over another streaming digital music product. They have their name out there, so they do not have to concentrate on their homepage. They do not realize that this can affect them in the end because of their future customers being confused by the homepage. iHeartRadioiHeartRadio has an odd homepage for value proposition because it does not say much. The homepage was made to be more interactive, which is a different take on the value proposition. The customer has to look at a few of the tabs at the top to see what all they offer. They do not list the price when the product is free, which would be a benefit for customers to know right away. iHeartRadio suggests on their homepage, “Tell us all the genres you like. We’ll suggest stations just For You.” (iHeartMedia Inc., 2015). They give you relevancy with their statement; they use photos, and under the statement, you can scroll through just a few genres they have listed. "For You," "Live Radio," "Artist Radio," "Genres," "Podcasts," and "More" are the tabs up on the top of the homepage to encourage the customer to browse. They should not assume people know the product is free. The customers have no quantified value of the product, but they show relevancy and unique differentiation with their website. They need to change their website to show customers that the product is free for all of the features because having the quantified value missing will scare customers off sometimes. They need a complete value proposition available, and on their homepage for customers to see. Customer Expectations and Their PromiseSpotify Spotify shows that it is not as popular as Pandora according to eMarketer (eMarketer Inc., 2015). On quantcast, they show that Spotify does have more users than Pandora and iHeartRadio combined (quantast, 2015). With the information on their value proposition, website, segmentation, differentiation, and positioning it seems that they are meeting customer expectations. They deliver their promises to customers on their homepage, and they are successful in giving their customers more options with their streaming digital music. Spotify has many different options on how to listen to music, and the customer has choices, and they are meeting customer expectations. They may have to make changes as technology advances, but right now they are making their customers happy.PandoraPandora shows that it is the most successful out of the three on eMarketer (eMarketer Inc., 2015). On quantcast they show that they only get half of the listeners as Spotify (quantcast, 2015). Their website homepage seems like it could be a problem that they should address. They do not deliver the promise of being the best or their product in general. They claim they play the stations customers want, but in all reality, the stations are filled with music that is not similar to what the customer enjoys. They do technically deliver their promise about the stations, but they leave out the promise of the stations playing music similarly. They do not have a way to listen to just one artist, and it seems this is not meeting customer’s expectations now. Pandora is starting to fail in some ways, and they will have to make changes to meet their customer’s expectations. iHeartRadioiHeartRadio shows they are more successful on eMarketer than Spotify (eMarketer Inc., 2015). On quantcast, they show something very different, and iHeartRadio is not very successful with many customers that the previous two have (quantcast, 2015). They are not even close to the amount of customers that the other two are getting. They are meeting customer expectations, and they offer so much more at a free price. They just need more marketing out there in the public, and they need to show everyone that they are free, unlike the other digital streaming music products. They do deliver their promise to customers, but they should have a better homepage textually. They do not seem to be going anywhere, so their customers will increase, especially if they market that the product is free.ConclusionAll three digital streaming music websites show how they are different in many ways. Their differences can be their success or eventual downfall in the end. All three need to change their marketing strategies, but Spotify seems to have the marketing aspects figured out right now. In the end, the homepage is the big issue for the Pandora and iHeartRadio, and in the future they need to make changes, or they will not continue or gain success. Everything is how an organization markets their business and the unique differentiation they offer.ReferenceseMarketer Inc. (2015, May 14). Pandora maintains strong audience lead over Spotify. Retrieved from eMarketer: Inc. (2015). iHeartRadio. Retrieved from iHeartRadio: Inc. (2015). Search our help site for answers. Retrieved from iHeartRadio: . (2015). Retrieved from quantcast: , P. (2015). Useful value proposition examples (and how to create a good one). Retrieved from ConversionXL: . (2015). Retrieved from Pandora: advertising. (2015). Retrieved from Pandora: One. (2015). Retrieved from Pandora: . (2015). Retrieved from quantcast: Shrimp, T. E., & Andrews, J. C. (2013). Advertising, promotion, and other aspects of integrated marketing communications (9th ed.). Boston, MA: Cengage Learning.Spotify. (2015). Retrieved from Spotify: for brands. (2015). Retrieved from Spotify: ................
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