Case Analysis: Napster

Case Study Outline of Napster

1) Situational Analysis

a. Marketing Objectives

Ð'„X To re-establish Napster as the market leader for online music downloading industry.

Ð'„X To establish a competitive market share in the pay-for-play market.

Ð'„X Regain the majority original customer base, and entice new users.

b. Target Market

Ð'„X Anyone that has internet access and an interest in music.

Ð'„X All ages, races, sexes, income levels, education levels and computer knowledge levels.

Ð'„X Anyone with a minimal understanding of the internet.

c. Marketing Mix

Ð'„X Product- Legal Music Downloads with the following benefits:

Ð'„Ð"Џ Music Downloads (Legal rights to 500,000 songs)

Ð'„Ð"Џ CD Burning

Ð'„Ð"Џ View Music Videos

Ð'„Ð"Џ Access Billboard Chart Information

Ð'„Ð"Џ Synchronize music to other devices

Ð'„Ð"Џ Message Boards

Ð'„Ð"Џ Detailed Artist and Album information

Ð'„Ð"Џ Parental Controls

Ð'„Ð"Џ Powerful Recommendation Engine

Ð'„Ð"Џ Personal Inboxes for Music and Messages*

Ð'„Ð"Џ Ability to Browse Other Users Music Collections*

Ð'„Ð"Џ Search Engines by Genre, Artist, Track Title, or Popularity

Ð'„Ð"Џ Complimentary products such as digital recording media, CDs and MP3 players

Ð'„Ð"Џ Ability to Send Music to Friends within or outside the service*

Ð'„Ð"Џ Access to Professionally Programmed Radio Stations*

Ð'„X Price-

Ð'„Ð"Џ $.0.99/ song

Ð'„Ð"Џ $9.95/ album

Ð'„Ð"Џ Premium Service $9.95 (includes all (*) products above)

Ð'„X Promotion-

Ð'„Ð"Џ Promote through partnerships with Microsoft, Gateway, Yahoo and Samsung

Ð'„Ð"Џ Partnerships with XM Satellite Radio, Tower Records in Japan, a marketing agreement with BellSouth Corp. of Atlanta

Ð'„Ð"Џ Possible partnership to rollout with cell phones on LM Ericsson of Stockholm

Ð'„X Placement-

Ð'„Ð"Џ Gift cards are available at various retail stores throughout music areas as well as point of purchase

Ð'„Ð"Џ Linked directly through Yahoo! by use of banners, search engines and e-mail

Ð'„Ð"Џ Napster soft ware is preloaded on all Microsoft computers (they hold 80% of the operating system market)

Ð'„Ð"Џ Samsung offers a digital audio player that is fully integrated with Napster 2.0

2) SWOT Analysis

Strengths

Ð'Ñ"Ð"§ Provides a legal alternative to music downloads

Ð'Ñ"Ð"§ Supporting the individual artist as well as the music industry through agreements with the 5 major recording labels

Ð'Ñ"Ð"§ Strong brand name rand reputation

Ð'Ñ"Ð"§ Alliances with industry leaders such as Gateway, Microsoft, Yahoo! & Samsung

Weaknesses

Ð'Ñ"Ð"§ Lack of a linkable device to transfer music to (i.e. iTunes has the iPod)

Ð'Ñ"Ð"§ Digital copies are not real copies

Ð'Ñ"Ð"§ Limited avenues for product differentiation

Ð'Ñ"Ð"§ Perception of Ð'ÐŽÐ'§selling outÐ'ÐŽÐ'Ё to the industry

Opportunities

Ð'Ñ"Ð"§ Massive market growth

Ð'Ñ"Ð"§ RIAA crackdown on illegal file sharing

Threats

Ð'Ñ"Ð"§ The availability of free downloads on various websites

Ð'Ñ"Ð"§ Advancements in technology

3) Decision Statement

Through a new advertising program, we hope to recapture our initial customer