Xm Satellite Radio Case
XM Satellite Radio 1. Value proposition of XM to different consumer segments and primary target segment.
XM had developed the capability to provide 50+ high quality (near CD quality) digital radio channels to cars and homes via satellite throughout the country. Such a service was not available before and has the ability to deliver uninterrupted service without any retuning needed. The value proposition here is high quality and ubiquitous radio broadcast, in addition to the variety of channels which will be of interest to different age and consumer groups and their disparate preferences. XM radio can also show song titles, artist and can be switched on at an ease of a button on the radio. Another possible value proposition under considerations is commercial free broadcasts, which will allow users to listen to shows and music without the inconvenience of listening to advertisements in traditional radio. Radio listening has increasingly become part of a car-driving activity with up to 31% of radio listening occurring in the car. XM’s consistent high quality service would be particularly appealing to this segment, which includes young adults, truckers, and commuters in both urban and rural areas. XM also stands to gain from serving advertisers as its various channels, directed towards specific consumer segments may help advertisers better communicate to reach these certain groups with high frequency. As for the primary target segment, XM radio should target young adults in 18-35 years age group who are forecasted to have a high demand for their service according to Exhibit 10. More specifically, male users in urban areas will have a higher willingness to pay for the product, along with Tech seekers (who have a tendency to adopt new technologies early) as seen in Exhibit 9. Thus, XM radio should primarily target drivers in the 18-35 year age group,
XM had developed the capability to provide 50+ high quality (near CD quality) digital radio channels to cars and homes via satellite throughout the country. Such a service was not available before and has the ability to deliver uninterrupted service without any retuning needed. The value proposition here is high quality and ubiquitous radio broadcast, in addition to the variety of channels which will be of interest to different age and consumer groups and their disparate preferences. XM radio can also show song titles, artist and can be switched on at an ease of a button on the radio. Another possible value proposition under considerations is commercial free broadcasts, which will allow users to listen to shows and music without the inconvenience of listening to advertisements in traditional radio. Radio listening has increasingly become part of a car-driving activity with up to 31% of radio listening occurring in the car. XM’s consistent high quality service would be particularly appealing to this segment, which includes young adults, truckers, and commuters in both urban and rural areas. XM also stands to gain from serving advertisers as its various channels, directed towards specific consumer segments may help advertisers better communicate to reach these certain groups with high frequency. As for the primary target segment, XM radio should target young adults in 18-35 years age group who are forecasted to have a high demand for their service according to Exhibit 10. More specifically, male users in urban areas will have a higher willingness to pay for the product, along with Tech seekers (who have a tendency to adopt new technologies early) as seen in Exhibit 9. Thus, XM radio should primarily target drivers in the 18-35 year age group,