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For downloading this essay and for more essays, papers, reports, study notes and more can always be found at: http://schoolessay.jimdo.com -------------------------------------Satellite radio is the new emerging industry with just a pair of competitors, and XM Satellite Radio has established itself as the 800 pound gorilla of this fledging market. Nearly 4 out of 5 satellite radio listeners subscribe to XM Radio making it the most listened to satellite radio service with over two million subscribers in the U.S. today (Satellite Radio, 2007). With the addition of the new Replay Radio service, XM Radio hopes to bring consumers an even more enjoyable experience as well as continue their success. In order to segment the market, XM Radio must consider the demographic of people to target. Currently, XM Radio caters to all age groups and demographics. The only criteria are that the consumer enjoy music and is able to afford the equipment and service. Initially, XM Radio’s strategy is to target urban professionals who are interested in advanced new technology. A series of television advertisements aimed at showing the addictive and high technature of the problem will be used to attract technology buffs to the new product. After the initial sales period, depending on how sales go, XM will begin to target automobile manufacturers and the general population. XM hopes to get the new product into retail stores such as Best Buy, Radio Shack, and Circuit City. By introducing products in these common stores, it can be exposed to the general public in at an affordable price. Replay Radio marketing team spent a great deal of time considering what type of person will purchase our product and his or her buying behavior. Good marketing strategies are one of the most important aspects to our success. Knowing just who the customer is, and how he or she thinks and the way he or she feels has a big influence on why they would rather buy Replay Radio. Replay Radio can be enjoyed by all ages, the average customer can range anywhere from teen years to middle age adults. Replay Radio will be modestly priced and geared towards low income customers as well as high income customers. Replay radio is aware of market shifts and XM is willing to offer potential customers with a quality product at an affordable price. Consumer buying power behavior refers to the actual buying power and the behavior of final customers (Anderson & Kolter, 2005). Consumer’s vary in all ages, income, and education level and taste (Anderson & Kolter, 2005). The way these consumers connect with each other also impacts the choices each potential customer makes. The key factors that will influence our customers purchasing decisions at replay radio, XM has been in the electronics industry for over 20 years and are known for producing quality products and XM stands behind its name. At present, there is only one other competitor in the satellite radio market, Sirius. They are a distant competitor in terms of their 20% market share, but in the past they have had several key advantages over XM. They claim to offer more stations, claim to have better satellite communication capability, offer a reasonably-priced lifetime plan, and feature exclusive licensing agreements with stations that will broadcast NFL, NBA, and NHL games as well as signing recently with the NRA and NPR. Recently XM has been catching up with Sirius on all of their disadvantages. Oprah Winfrey just signed a deal to do a reality show called “Oprah and Friends” about her and her friend Gayle. Along with all the other deals made, Oprah is the icing on the cake. Many people will want to have Replay Radio so they won’t miss Oprah, she has one of the most TiVo’d shows in America (XM, 2007). Pricing is aggressive and both companies are competing to not only gain market share, but woo new subscribers from the many millions of radio listeners that have been skeptical of paying for radio service. Though XM and Sirius have been competitors from the beginning of the satellite radio craze, in February 2007 XM announced plans to merge with Sirius radio. If the deal goes through Sirius and XM will be teaming up to create a single satellite radio network throughout Canada and the U.S (Wikipedia, 2007). This will be the perfect time to introduce Replay Radio to America and Canada. SWOTT AnalysisStrengthsXMSatellite Radio has established itself as a major provider of satellite radio services. XM will have no competition in the market with this product since Sirius, the only other licensed satellite radio provider, does not have a product like this on the market. XM radio is associated with high quality vehicle manufacturers such as GM, Cadillac etc… which appeal to the markets that will be attracted to a XM Satellite Radio
Recorder(SRR). XM offers systems that are “fixed and mobile” enabling user to access anytime and anywhere (XM Marketing Plan). XM has clear quality sound which will provide excellent quality recordings (XM Marketing Plan). WeaknessesTheSRR has yet to be tested. The cost to implement and introduce the SRR may outweigh the benefit (XM Marketing Plan). The monthly XM Satellite Radio charge will have to increase with this product which may limit customer interest. Since this product will be new to the market it may be difficult to attract investor’s interest. OpportunitiesThisproduct will provide XM with increase in public relation opportunities and media coverage. If successful this product can help to increase the customer base for XM satellite radio. This product can create an opportunity for XM and its competitor to come to a technological arrangement that will benefit both satellite radio system providers. ThreatsThis new product can be copied by Sirius satellite radio or the satellite system could fail. Sirius could be become more innovative than XM and profits could plummet. The product may not work out be as successful as planned and money will be wasted on developing it. TrendsThemost important trend in radio is the ability to have commercial free radio available at any time. Satellite radio has provided the options of different music genres that appeal to the consumer changing listening wants. Marketing has decided upon two methods of research for the Replay Radio receiver. The first method will be a series of three focus groups, including participants from urban, suburban, and rural areas. The focus groups will be held in Boston, Atlanta, and San Francisco. Education levels, economic levels, and marital status will further classify the participants in an effort to develop as wide a cross section of the population as possible. The second method will consist of survey research. This will be conducted in two ways. First, a massive mailing distribution will allow the marketing department to reach a large amount of people. These surveys will be used to reach as many people as possible. In spite of the low response rate this method typically provides marketing believes that it will yield beneficial data. The second survey will be conducted via the Intranet by placing a banner and XM promotional "chance to win" coupon on the Yahoo.com homepage. This relatively new survey method is growing in popularity and allows XM marketing to reach a larger section of the consumer population. Replay Radio differentiates itself as product that is the first of its kind. The concept is very innovative and it fits into the way technology is presenting itself today. People have less time to enjoy things nowadays. Replay Radio gives them a chance to make sure that they are able to take time out to enjoy things. By being able to record their favorite radio programs, other plans do not get in the way of it. Programs can be enjoyed while in the car leaving work or anytime they may drive anywhere. Technology tends to be based on convenience today. XM Satellite Radio positions itself as the best choice for coast-to-coast CD-quality sound through superior listening choices, competitive pricing, and readily available equipment. As demonstrated by the rapid growth of it subscriber base, "XM Radio has beaten its rival, Sirius, to market and has become the first source for satellite radio" (Godes & Elie, 2007). In order to continue this success, XM must stick to a concrete marketing plan and keep coming up with innovative ideas before the competition. ReferencesAbout.com (n.d.). Satellite Radio. Retrieved from:http://radio.about.com/cs/satelliteradio/ht/blpicksatellite.htmAnderson, Frisbee, Carroll, (2005). XM marketing plan. Retrieved electronically from:http://www.xmradio.com/marketingArmstrong, Kotler, (2005). Marketing: An introduction.New York: Pearson Education, Inc. Godes, B. and Elie, O. (2004, Jan. 5). XM Radio. HarvardBusinessOnline.com. Retrieved fromhttp://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml?id=504009XMRadio.com (n.d.). Retrieved from http://www.xmradio.com