Marketing Strategies - Krista Jacksonkristarjackson.weebly.com/.../0/87103506/aet_552_mark… · Web viewThey do use many different marketing strategies, ... The ages 18 to 54 are

Running head: MARKETING STRATEGIES 1

Marketing Strategies

Krista Jackson

AET/552

November 30, 2015

Dr. Dennis Morrow

MARKETING STRATEGIES 2

Abstract

This 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 proposition


Marketing Strategies

The 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 Positioning

Spotify

Segmentation. 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.

Pandora

Segmentation. 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.

iHeartRadio

Segmentation. 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 (iheartradio.com,

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.

Spotify

Spotify 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.

Pandora


Pandora 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.

iHeartRadio

iHeartRadio 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 Promise

Spotify

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.

Pandora


Pandora 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.

iHeartRadio

iHeartRadio 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.

Conclusion

All 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.


References

eMarketer Inc. (2015, May 14). Pandora maintains strong audience lead over Spotify. Retrieved

from eMarketer: http://www.emarketer.com/Article/Pandora-Maintains-Strong-

Audience-Lead-Over-Spotify/1012476

iHeartMedia Inc. (2015). iHeartRadio. Retrieved from iHeartRadio: http://www.iheart.com/

iHeartMedia Inc. (2015). Search our help site for answers. Retrieved from iHeartRadio:

http://help.iheart.com/customer/en/portal/articles/97651-how-much-does-iheartradio-for-

iphone-and-ipad-cost-

iheartradio.com. (2015). Retrieved from quantcast:

https://www.quantcast.com/iheartradio.com#trafficCard

Laja, P. (2015). Useful value proposition examples (and how to create a good one). Retrieved

from ConversionXL: http://conversionxl.com/value-proposition-examples-how-to-create/

Pandora. (2015). Retrieved from Pandora: http://www.pandora.com/

Pandora advertising. (2015). Retrieved from Pandora: http://advertising.pandora.com/

Pandora One. (2015). Retrieved from Pandora: http://www.pardora.com/one

quantcast. (2015). Retrieved from quantcast: https://www.quantcast.com/

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: https://www.spotify.com/us/

Spotify for brands. (2015). Retrieved from Spotify: https://www.spotify.com/us/brands/targeting/

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Marketing Strategies - Krista Jacksonkristarjackson.weebly.com/.../0/87103506/aet_552_mark… · Web viewThey do use many different marketing strategies, ... The ages 18 to 54 are