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.