Spotify Final Product Update
Company OverviewCurrent Situation :
◇ Over 100 million users and 40 million
premium users
◇ Present in 60 markets worldwide
◇ Global leader of music streaming industry
Current Target Market:
◇ Urban areas
◇ Women, 18-28
◇ Single, not married
◇ Middle class
◇ Athletic, tech-savvy, young and influential
Situation AnalysisStrengths
◇ Music Selection
◇ Subscriptions
◇ Social platform
◇ Cross-platform compatibility
◇ Ad-revenue
Weaknesses◇ Licensing problems
◇ Payment to record labels
◇ Payment to artist
◇ Users without subscriptions
Opportunities◇ Improving credibility with record
labels
◇ New partnerships
◇ Sources of revenue
◇ Live concert streaming
Threats◇ Social media platforms joining the
market
◇ Illegal downloads for music
◇ Revenue
◇ Artist pulling back
SMART ObjectivesBusiness Objectives
◇ Turn more free listeners into subscribers
◇ Increase revenue from advertisements
Product Objectives◇ Differentiate further
from Apple Music, Pandora and Tidal by focusing on playlist features
◇ Establish loyalty program with incentives
◇ Make the app more social between users
Marketing Objectives◇ Promote trendy
image to current and new users
◇ Target ages 30-45 to expand target market into an older demographic
◇ Promote unique features to free listeners
Product ConceptGeneric Product
◇ An app/computer app to play music on
◇ Music streaming
Expected Product
◇ Ability to create and listen to playlists
◇ Ability to search for artists/songs
◇ Wide variety of music
◇ Radio feature
◇ Free trial period
Augmented Product
◇ Music discovery/recommendations
◇ New release playlist
◇ Spotify running
◇ Offline streaming
◇ Podcasts/videos
Potential Product
◇ Message friends
◇ Connect recommendations to local
artists and weather patterns
◇ Leverage user data for brands
DifferentiationQuality sets Spotify apart◇ Large music library (30 million songs)
◇ Ability to create and discover playlists
◇ Great music quality (320 kbps)
◇ Spotify Running
◇ Customized to user
◇ Interface
◇ Offers podcasts and videos
New Strategy
StrategyCustomer
◇ Illustrate the customization to the consumer
◇ Convert the free customers to paying customers
◇ Convert the discounted students to paying customers when their discount ends
Product◇ Differentiating the
product from competitors and showing our target market this
◇ This product is customizable based on consumer
Brand◇ Showing the quality of
the brand
◇ Showing consumers that this is a trendy brand
◇ Facilitating purchase through brand messages
New Marketing Mix
◇ Product: Customized Music
Streaming service
◇ Place: App on phone, online
◇ Price: Free, $4.99, $9.99
◇ Promotion: Spotify Premium
on free app, Premium student
amount via social media
◇ Target Market: Changing demographics from 18-28 year old women to older audiences, men and women 18-40+
◇ Social media will help target this expanded market■ Facebook this will help reach our
target market■ #ThrowbackThursday campaign
for older audiences
Potential Strategy◇ Creating a basic trial period to go along with the free and premium◇ They would get a 60 day trial of the basic package which would mix
some premium features ◇ After the trial ends they will have to decide between upgrading to
premium or going to the free version of Spotify◇ This will help facilitate purchase
■ They will either upgrade or downgrade and see the features they have been missing and switch to premium
Basic:Ad Free
Spotify RunningPlaylists
Discover WeeklyUnlimited Skips
Free:AdvertisementsSpotify Running
PlaylistsDiscover Weekly
Premium:All Basic Features
Listen offline/download
Play any trackHighest Quality
Audio
Potential Marketing AdsSocial Media◇ Implement a “#ThrowbackThursday” on all platforms to help target our
expanded target market of 30-45 year old men and women◇ Advertise our new Basic package to reach potential customers◇ Post our marketing campaign on social media to expand our reach
Ads on Spotify◇ Increase ads on the app itself to help customers want to change to
premium◇ Utilize the ads on spotify to list benefits of premium to help convert
customers
Marketing Campaign◇ Showing the customizable features◇ Loyalty program
ConclusionKey Takeaways:◇ Expand our target market◇ New social media campaign to reach our new target
market◇ Adding the basic trial for 60 days to help facilitate
purchase◇ Loyalty program
Overall: This new strategy will help reach a market that Spotify is currently not reaching. The new basic plan will help bring in more premium customers. And in general, make sure Spotify is expanding their business.