Case Analysis: Napster

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Case Study Outline of Napster 1) Situational Analysis a. Marketing Objectives „X To re-establish Napster as the market leader for online music downloading industry. „X To establish a competitive market share in the pay-for-play market. „X Regain the majority original customer base, and entice new users. b. Target Market „X Anyone that has internet access and an interest in music. „X All ages, races, sexes, income levels, education levels and computer knowledge levels. „X Anyone with a minimal understanding of the internet. c. Marketing Mix „X Product- Legal Music Downloads with the following benefits: „Ï Music Downloads (Legal rights to 500,000 songs) „Ï CD Burning „Ï View Music Videos „Ï Access Billboard Chart…show more content…
„Ñ Show artists united with Napster¡¦s brand in advertising efforts. „Ñ Napster should offer a frequent buyer/loyalty program to aid in customer retention. „Ñ Offer monthly specials such as being able to download certain amount of songs at a monthly recurring price. „Ñ Compete with competitors like iTunes by offering weekly e-mail specials for a free music download (or other desired promotional activity). „Ñ We feel Napster should aim to regain some of its former market share but not expect to get 100% back. Taking into account that Napster is now a fee based company versus a free download company. UPDATE on Napster 2.0 At the end of the fiscal 2007 year, Napster CEO, Chris Gorog concluded that Napster was the ¡§most popular on-demand music subscription service with healthy annual revenue growth and a significant decline in cash burn.¡¨ The company is remaining focused on bottom-line improvement and to continue surging forward capitalizing on their strong market share position. Gorog believes that the new era of music-enabled cell phones will be a ¡§substantial contributor to Napster¡¦s future growth based on their partnerships with the leading wireless carriers and handset manufacturers worldwide.¡¨ At the end of March 31, 2007, Napster¡¦s total worldwide subscriber base was 830,000. The number of paid subscribers jumped 47 percent from the third to fourth quarter in 2007 and 37
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