Sirius Xm Radio

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Competitor Analysis:

After Sirius merged with XM to form SiriusXM, the company virtually formed a monopoly in satellite radio. SiriusXM’s main competitors currently are online music streaming services such as Spotify and Pandora. Both Spotify and Pandora are focused on younger customers, and they offer recommended music and preset playlists based on genre or mood. Competitor strengths include their being free to use on computers or mobile devices. Spotify and Pandora also offer ad-free listening for a monthly fee, which generates profits for these companies. Additionally, they are well-designed for mobile app use. However, these companies have a clear weakness compared to SiriusXM, because SiriusXM radio receivers are built into cars. Additionally, SiriusXM caters to commuters, who comprise a large percentage of the consumer population.

Customer Analysis:

Sirius XM currently uses a combined marketing strategy to target their customers by aiming two or more submarkets at the same time and with the same marketing mix. Their submarkets include:

- A wide range of automakers and auto dealers in the United States, from family cars to luxury cars- through this partnership with automakers, auto dealers, and vehicle rental companies, Sirius XM offers a free trial of their satellite radio services in these cars. The trial usually covers six-month or one-year subscription and depends on service types and automakers. This partnership exposes more potential customers to SiriusXM’s products/services while giving these auto manufacturers an edge over their competitors who cannot offer satellite radio subscriptions with the sale/lease of their cars.

- People who are popular music fans, ages 16-34. Regardless of gender, they are enthusiastic about new trends of music and spend a lot of time per day listening to music. Most of them are students or recent graduates. They listen Sirius XM radio either from prepaid channels in their vehicles or from Sirius XM Internet services. Their needs of Sirius XM radio can be described as social needs, since most of them stay in their earlier twenties, and they are music-lovers, they would like to have common topics that can communicate with/stay the same with their peers, music and sports are good ones. On the other hand, these people are highly dynamic. They are always chasing high-quality services with lowest subscription fees so that they are more likely to switch to other online music providers. Moreover, in next five to seven years, they will become more and more getting involved in family life and are more likely to change their spending habits as they settle down (get married, have children etc.)

- People who are subscribers and buyers of Sirius XM satellite radios. Most of them hold white-collar jobs, are aged 35-50, have household stable annual income around 100,000-200,000 dollars and reliable occupations. They are fans of outdoor recreation/activities. They listen satellite radio when they are hiking, jogging, fishing, even when travelling on airplanes. Their need for Sirius Satellite radio is very personal. These types of customers are enjoying their lives as the radio creates backgrounds and certain relaxation for them.

SiriusXM’s current customers need and want a variety of programming, commercial-free radio and nationwide access to satellite radio programming.

Opportunities and Threats:

Because Internet access has become somewhat ubiquitous through the advances in cloud and cellphone technology, consumers are able to stream music for free or for a lower price than SiriusXM offers. Thus, Spotify and Pandora (or other similar services) pose a threat to SiriusXM because they offer a similar service for a dramatically lower cost. Additionally, Pandora has been considering creating radio stations for the car, thereby posing an additional threat. However, SiriusXM has achieved full market penetration in the auto industry. On the other hand, there is an opportunity for this company in Internet radio services. Because Internet radio is easy to use (a consumer only needs a computer or internet-enabled cellphone) SiriusXM could break into this market, and compete with streaming services like Spotify or Pandora, because they offer talk radio and playlists organized by DJs, so that the listener does not have to do any work.

Marketing Plan Objectives

SiriusXM’s marketing plan objectives should be focused on enhancing their strengths and minimizing their weaknesses as compared to their competition, and taking advantage of the opportunities and threats that are presented by the external environment. SiriusXM should continue to capitalize on it’s strength of being prominent and visible in the market by partnering with even more automobile corporations so that more people become aware of the service and have the option to purchase it. These partnerships are their major strength compared to their competitors like Pandora and Spotify, and SiriusXM should continue to take advantage of these opportunities. Through these partnerships

SiriusXM has achieved almost full market penetration in their existing market of satellite radio receivers in cars. In order to minimize weaknesses, SiriusXM might want to offer a more accessible mobile app like Pandora and Spotify. Some opportunities that are presented in the external environment are a possible merger with Pandora. Other opportunities include market development, taking the existing SiriusXM service and bringing it to a different target market.

Opportunities for SiriusXM to explore

Opportunity (1): SiriusXM App and Internet Radio. SiriusXM should redesign its mobile app to make it more user-friendly, and on this platform it could expand its Internet radio services. The target market for this app would be people aged 14-23, college students and/or high school students with access to cellphones and computers but no cars. SiriusXM could use a tactic similar to Pandora or Spotify by offering free trial month/months or a lower subscription price to be more competitive with other music streaming services. Expenses for this idea would be limited, because SiriusXM would only need to modify an existing product (the SiriusXM mobile app). Additionally, SiriusXM should advertise this product on social media and/or TV channels and websites frequented by its target demographic. This opportunity falls under market development, because SiriusXM would be taking an existing product and bringing it to a new market.

Opportunity (2): Expansion into Europe and/or Asia. We know that there is an existing demand