Essay Xm Radio Case Analysis

2724 Words Jun 12th, 2008 11 Pages
Case Study
1) What is the value proposition of XM to different consumer segments? Who should be the primary target market for XM?

XM satellite radio’s value proposition for their customers is XM’s ability to provide radio service throughout the entire country regardless of a consumers’ location. Furthermore, terrestrial radio offers limited selection and is becoming increasingly cluttered with commercials. Therefore, XM satellite radio provides a greater selection of radio for the various preferences of consumers, commercial free. Furthermore, as an added bonus subscribers will have the opportunity to listen online from their home or office.
Based on XM’s research, I believe their target market should be focused on the Tech-Seekers
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For example, in 2004 Clear Channel launched a new campaign with the slogan “Less is More”. With this campaign, Clear Channel is offering 30, 10 and even 1 second advertising spots. Consequently, consumers will begin to become frustrated with this and look for alternative methods for music, news and talk radio. Therefore, XM needs to be very cognizant of how to incorporate advertisements without upsetting their customers. XM’s biggest concern will be what channels they add advertisements to and how much air time they will devote for advertisements. The best scenario is to add advertisements to talk and news radio stations. These stations are more inclined for such spots and will provide the necessary breaks for hosts. In addition, these consumers are more tolerant of commercials than music listeners.

5) What are the implications of the expected launch plans for XM's rival Sirius?

There are several implications of the impact XM will have on their rival Sirius. Sirius will have to determine whether or not XM is going to offer a subscription or advertising based model. This decision will have such a huge impact on Sirius because it will help them determine the cost for their service since they are committed to having a subscription fee. Also, Sirius will have to determine if XM is going to implement advertising elements to their service and charge a fee. These factors are so important to Sirius because it will force them reevaluate

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