Xm Satellite Radio Case

1009 Words Jun 17th, 2013 5 Pages
1. Define the customer/prospect segments.
In 1997 XM Satellite Radio was investigating how they could utilize customer segmentation to create a focused target market in their business plan. After proper consideration XM Satellite Radio determined that a multi-segmented approach would be advantageous to their business model. A multi-segmented approach would allow for XM Satellite Radio to tailor certain stations to meet the needs of large populations that share distinct characteristics. This approach would not only be beneficial to bringing in revenue dollars through subscriptions, but it would help attract advertising revenues into the business, if advertising was the route taken. Advertisers would be drawn to XM Satellite Radio’s
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3) Seniors represent the final customer segment under the age demographic. The age of these individuals are 55 years old and older. Seniors represent a small subscription base, but should not be ignored. Seniors are living more active lifestyles now more then ever and are willing to purchase products to help achieve this (Kotler 220). XM Satellite Radio could create value propositions based on this. Music can be a motivator in being active and bring back fond memories through music.

4) African Americans represent the largest minority in the US totaling 23.7 million people (in 1997). This customer segment not only represents a significantly large population in the US, but a home demand level of 6 million people, totaling annual revenues of $864 million. Possible value propositions to this semgent could be the variety of channels, unsenored lyrics, great value and little to no advertisements.

5) Hispanic Americans are also a large minority in the US, totaling 20.2 million people in 1997. The home demand level for XM Satellite Radio actually exceeds that of African Americans, by 100,000 people, despite being an overall smaller population. This home demand level could result in $878 million in subscriptions. Due to the lack of national Spanish speaking radio stations, value propositions for this segment could be several entirely Spanish stations, sound quality and price.

6) Business People are a slightly smaller customer segment that

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