...Executive Summary: XM satellite is a newly established company that has the potential and the ability to become leading satellite radio service provider in United States. At the time of the case, the demand for high quality, ad-free and mobile radio had a great potential and XM along with Sirius received a great opportunity to enter into the untapped market. XM’s only significant competition threat was Sirius. Both Companies were trying to capture market share from one another by creating superior customer access channels and build a brand image. These could have been done through retailers and strategic partnerships with radio producers for home and car markets. The home product brands include Sony, Pioneer, Matsushita and Car audio products include Sony, Pioneer Alpine, Delphi and Visteon The major issue for XM was how to market, how to price and what will be the value proposition. Since there were only two companies in the market the pricing of the service could significantly shift the demand and estimated/desired earnings. In order to thoroughly analyze the problem and seek viable alternative solutions I will try to list some of the key marketing issues. Key marketing issues include but are not limited to: * Creating brand awareness: In my opinion it is very important to mention that potential future customers are only the ones who are aware of the brand. The creation of brand awareness would be complicated given the company’s value proposition to keep ads off the...
Words: 3953 - Pages: 16
...that have high average fares with a diversified geographic flight schedules that include both short and long-haul routes. 2. Principle Products or Services: low-fare, low-cost passenger airline offering, high-quality customer service. 3. Markets: in Forest Hills, New York, 56 cities in 19 states, Puerto Rico, Mexico and five countries in the Caribbean and Latin America, international flights to Montego Bay(Jamaica), Cancun(Mexico), Barbados, Saint Lucia, Kingston(Jamaica), Santa Domingo(Dominican Republic). It is well positioned in the New York metropolitan areas (which is one of the largest travel markets). 4. Compete: new aircraft, roomy leather seats with lots of leg room, 36 channel of free DirecTV, 100 channels of free XM satellite radio, free and unlimited brand, and named snacks beverage. It also provides compensation to customers who experience avoidable inconvenience (JetBlue Airway Customer Bill of Rights). And refundable fares and new payment options launched JetBlue.com in Española. JetBlue Business Card can also be used. In flight, it is equipped with an in-seat digital entertainment system. Each individual seat has a monitor with armrest remote with channel and volume controls. 5. Concerns for Survival, Growth, and Profitability: operating expenses, functional costs, airline fuel cost and consumption increased, other airlines provide Wi-Fi access and enhanced in-flight entertainment options according to customer’s interests in low price as well as...
Words: 331 - Pages: 2
...with higher radio and subscription prices because the market will take time to develop and XM should not be the bearing the brunt of the development costs. Later, lower prices on both aggressively in order to attract more subscribers and begin to introduce limited advertising. Work with auto manufacturers, offer subsidized prices, let radio manufacturers and retailers handle the home and aftermarket markets, offer subsidies. Target the male market and Hispanic/other direct, cell phone, content providers 1. What is the value proposition of XM to different consumer segments? Who should be the primary target market for XM? XM caters to the various consumer groups and better targets everything from broad groups to small niches. XM will offer better, more focused content to the consumer at a reasonable cost with ease of use and cheap to start and fewer commercials. XM should target the market that is most likely to result in paid subscriptions and to which its content is geared, look it up. 2. What aspects need to be considered in pricing the radio receiver and subscription fee? What is the optimal price for a monthly subscription? XM needs to consider the affect on the number of end subscribers based on the cost of the receiver and the subscription fee. They already did studies that give insight into which price points might be most effective, see spreadsheet. Clearly, XM will need to be sure of where the breakeven point is and what the scalability is and what...
Words: 1735 - Pages: 7
...because JetBlue reproduced many of SWA’s cost-reducing activities such as flying point-to-point to directly connect city pairs. It also predominantly uses one type of airplane, the Airbus A320, to lower its maintenance costs. And in addition, it flies longer distances and transports more passengers per flight per than SWA, further driving down its costs. So far, all these strategies have to do with cost-leadership. JetBlue also incorporated the differentiation strategy in their model. They executed the differentiation strategy by offering value-enhancing features include high-end 100-seat Embraer regional jets with regional jets with leather seats, individual TV screen with movies, Live TV, Fox TV, and Direct TV programming, 100 channels of XM Satellite Radio, and free in-flight Wi-Fi capabilities. By offering these unique features, JetBlue made an attempt to enhance their differentiation appeal. 2. What challenges is JetBlue facing with its chosen business strategy? What is the cause of these challenges? How should they be addressed? The challenges that JetBlue is facing not being able to create value anymore for the customers....
Words: 638 - Pages: 3
...2/27/12 Research Paper #1 Satellite Radio: Past, Present, and the Future Satellite radio, also called digital radio, is a relatively new technology to hit the audio broadcasting industry. Satellite radio is transmitted from 22,000 miles above the earth through a multitude of different satellites stationed over the United States (Bronsor, Howstuffworks.com). Through means of digital transmission the signal received and heard in satellite radio is often regarded as superior to the traditional radio experience. It emerged in 2001 with Tim McGraw being the first one to ever broadcast live on the newly developed system. It has been highly regarded as just a trend and having been invented in the wrong decade, however the major provider claims to have 20 million subscriptions to their radio programs (SEC, Form 10-K). While that is a substantial number of subscribers the technology has failed to capture the market as a whole. Its availability has been undermined by a monthly fee around 15 dollars, which has done a good job inhibiting ambitions to jump onboard this new advancement. Digital radio is a great invention however it is seen more as a prestigious service than it is as the next major form of radio for all. Two major players throughout its existence, Sirius and XM, have controlled digital radio since the beginning of its popularity. The two companies were the only two licensed for the rights by the FCC to broadcast radio by means of satellite (Hart, Washington Post)...
Words: 1722 - Pages: 7
...passenger airline. Co. operates primarily on point-to-point routes with its fleet of 120 Airbus A320 aircraft and 49 EMBRAER 190 aircraft. As of Dec 31 2011, Co. served 70 destinations in 22 states, Puerto Rico, Mexico and 12 countries in the Caribbean and Latin America. Co.'s onboard offerings include inflight entertainment systems which consist of 36 channels of DirecTV®, 100 channels of XM satellite radio and movie channel offerings; and a range of snacks and beverages. Co.'s subsidiary, LiveTV, LLC, provides in-flight entertainment, voice communication and data connectivity services for commercial and general aviation aircraft) (Business Summary, 2012). The company's other businesses include LiveTV, a wholly owned subsidiary which provides in-flight entertainment, voice communication and data connectivity services for commercial and general aviation aircraft. LiveTV has contracts with seven other domestic and international commercial airlines for the sale of certain hardware and installation, programming and maintenance of its live in-seat satellite television. It also has contracts for its XM Satellite Radio Service and for certain other products and services...
Words: 309 - Pages: 2
...Sirius XM And the viable business model 2010 PART 1 Introduction Headquarters in New Yorok City, Sirius XM Radio, Inc. is the only provider of satellite radio, broadcasting more than 130 channels of digital audio via satellite to subscribers throughout the United States and Canada. The company's programming includes 65 channels of commercial-free music from every genre and 55 channels of news, sports, comedy, and talk radio. With impressive line ups of celebrity such as Howard Stern, Oprah Winfrey and Martha Steward there is something for everyone. Sirius's broadcasts are beamed from four in orbit satellites to more than 19.5 million subscribers who pay a monthly fee of $12.95 (Sirius). The service is mainly offered through new car sales with companies including Ford, Chrysler, and BMW among others penetrating 55% into the US market which accounts for 40% of their annual sales based on the 2009 annual report. Retailers like Wal-Mart, Best Buy and Radio Shack sell similar Sirius units for home and boat use. “Recently, Sirius has expanded to include music and comedy channels to mobile phone users; and music channels and select non-music channels over the Internet; a suite of data services; services that offer graphic information; and various real-time weather services, as well as operates a television service, which provides content designed primarily for children in the backseat of vehicles” (Sirius). These expansions are critical to the long term success of Sirius...
Words: 10644 - Pages: 43
...shows that JetBlue has given its costumers what was promised. JetBlue began flying in February 2000, so in four years they made a great effort, this also shows that the company was dependable and that the costumers were happy to fly with JetBlue. Assurance: Neelman, the founder of JetBlue was very connected with his employees and his costumers, which made it easier for the customers to feel safe flying with JetBlue. “He traveled frequently on JetBlue flights, working alongside employees, talking with pilots in the cockpit, visiting with customers about their experiences, and asking how the airline could better serve them.” Tangibles: JetBlue offered its customers free XM satellite radio, DIRECTV satellite television, and Bliss Spa comfort kits. Passengers could watch live television, listen to satellite radio and they can also purchase 20th Century Fox inflight movies. It was the first airline to deploy the new Embraer 190 regional jet and the first to offer free live television. Empathy: JetBlue has won dozens of top awards for its performance and the second-lowest rate of customer complaints among the 10 largest U.S. airlines. Also, as previously mentioned Neelman was very involved with his employees and his customers asking them about their experiences, Responsiveness: After the company’s big loss of $20 million in the end 2005, Neeleman and Barger discussed a plan for recovery, which was very effective since their revenues rose 39 percent in 2006, to $2.36 billion...
Words: 529 - Pages: 3
...Sirius XM Canada MGT6910 – Policy and Strategy - Industry Bambie Hayes Shorter University Sirius XM Canada is a satellite media company and is one of the largest subscription based companies in Canada. Sirius XM Canada has 2.5 million subscribers and a 14 percent market share in the Canadian radio industry. Sirius XM Canada offers 120-130 channels that include sports, children, news, and talk programming (Sirius XM, 2015). Sirius XM Canada’s revenues were CAD 79 million for the first quarter 2015 (Q1 2015 Sirius XM, 2015). The Federal Communications Commission approved Digital Audio Radio Service’s usage for radio frequency for satellite broadcast in 1992. Two companies, Sirius Satellite Radio and XM Radio were awarded licenses to use radio frequencies. Sirius Satellite Radio and XM Radio were originally launched in limited cities, however, by 2002, both companies offered services nationwide. In the United States, satellite radio is regulated by the Federal Communications Commission. In Canada, satellite radio is regulated by the Canadian Radio and Telecommunications Commission. Canadian subsidiaries are required to have Canadian ownership (Hitt, Ireland, & Hoskisson, 2015) Satellite radio uses original equipment manufacturer, chip sets, and receivers to provide service to customers. The receivers are plug and play or factory-installed into vehicles. However, the impairment expense to upgrade outdated equipment is costly. For example, Sirius XM spent U.S. $22.3 million...
Words: 1319 - Pages: 6
...XM’s value proposition to the market is to deliver diverse high quality digital radio content to consumers across various demographics and nationwide via a complex satellite and terrestrial network. A key advantage with XM’s satellite radio over AM/FM radio is the near-ubiquitous radio coverage that significantly strengthens broadcast signals outside the traditional broadcast area. Given the vast and high-growth car radio market and strong home segment demand, XM should target both submarkets. When pricing the radio and subscription fee XM needs to evaluate the potential demand for the product/service based on various revenue and cost assumptions, cost/benefit of advertising vs. not advertising, and the profit implications for various scenarios. Based on expected consumer response and an analysis of the above factors over a five yr. customer lifetime, we determined that XM should start offering a $100 radio with ad-free service of $10/mo. (SIRIUS price) and with-ad service of $5/mo to attract customers ($9.2 bn profit). As XM builds its customer base over time, it can raise the product/service prices to generate higher profits. By doing so XM could reach out to potential consumers who desire satellite radio but are not willing to pay the high $10/mo. ad-free fee. Furthermore, XM could differentiate itself from SIRIUS and retain customers by offering exclusive programming. The benefits of including advertisements are expected to outweigh the costs and can provide...
Words: 424 - Pages: 2
...Introduction Sirius XM is the leader in satellite radio providing commercial free music, sports, and talk radio. They are two separate companies that competed for the advantage which ended a few years ago with their merger. They since have dominated the commercial free market being available in almost every new vehicle that is purchased. There are a few different other companies in the substitute market that try to compete with Sirius XM by allowing subscribers the ability to select playlists of music fitting them with their favorite genre. These other companies do not directly compete with Sirius XM, but they are putting pressure on them and stealing away subscribers. We will see how well Sirius XM has executed their current strategy by assessing...
Words: 1428 - Pages: 6
...1) What is the value proposition of XM to different consumer segments? Who should be the primary target market for XM? * Nationwide coverage with excellent audio service * Greater variety of channels to choose from * Availability: home as well as for people on the go * Commercial-free XM satellite radio’s ability to provide radio service throughout the entire country regardless of a consumer’s 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, their target market should be focused on the Tech-Seekers demographic. This demographic appears to present the best opportunity for market penetration. They are more inclined to purchase the XM service and become lifetime customers because of their desire to be on the cutting edge of technology. Moreover, this demographic is very similar to the second largest market interested in satellite radio, Tech-Friendly consumers. Therefore, there is greater opportunity for these Tech-Friendly consumers to purchase the service as well. Between these two groups, XM satellite radio has the ability to gain quick financial stability to capture more of the market share. 2) What aspects need to be considered...
Words: 869 - Pages: 4
...XM satellite radio and Sirius satellite radio are the duopoly companies that compete each other in imperfect competition market in order to replace radio wave, FM AM, with satellite radio. There are barriers to entry this market since it needs a high cost. FM and AM are government owned and the network coverage is limited. In order to eliminate this complication, XM and Sirius introduce satellite radio, which have competitive advantages such as nationwide coverage, high quality audio, wide array of entertainment options, easiness to access. However, Sirius strategy is to create a free commercial radio and used subscription based service. In my opinion, in order for XM to win over Sirius is, to have wide variety of subscription fees targeting different segments of markets. For example, to price sensitivity customers, XM could charge them lower subscription fee but with a few advertisement. Nonetheless, higher prices for customers who want commercial-free radio. By that way, XM could generates revenue from advertising service from price sensitivity customer and at the same time not losing the advertising service revenue from not price sensitivity customers since they are charged higher price. The aforementioned strategy leads to higher income to the company in compare to Sirius company that adopt subscription-only model. Thus, the supernormal profit could cover the expected annual operating expenses that are high-priced. The other strategy is ‘keeping that customer’ strategy and...
Words: 348 - Pages: 2
...Title of the Case: Satellite Radio (B) Time Context or Period: 2005-2008 Summary of the Case: Late 2005 proved to be the high point of expectations for satellite radio due to the unexpected increase of subscriptions for Sirius and XM Radio that even surpassed forecasts made a year earlier. As 2006 progressed, the growth rate started to decelerate and both companies have continued to lose money. Competition in the market became stiffer because of the rapid growth of technology which led to the birth of new gadgets used in consuming music. Also, a sharp downturn was also experienced by the auto business due to the crisis felt the by the United states. Because of these factors, Sirius and XM Radio have decided to undergo a merger agreement because of the benefits that the merger offers. However, the proposed merger faced regulatory hurdles with the Department of Justice and the FCC, and oppositions from the National Association of Broadcasters (NAB). Later on, in March 2008, the Department of Justice and the FCC gave their “go signals” to the merger provided that the new company, which is named Sirius XM, to offer more content a la carte pricing which gave a huge impact on its revenue. Despite positive cash flows that the forecasts stated, Sirius XM continued to have difficulties, especially in funding current liabilities, because of the crisis felt in the automobile industry, and by late 2008, the stock of the new company was traded under $0.40 a share. Mission/Vision...
Words: 1198 - Pages: 5
...The Sirius XM Radio Stock I chose Sirius XM Radio as one of my stocks because as I was reviewing the stocks I was going to pick for this project , I saw that Sirius XM Radio was doing rather well. Sirius XM Radio was founded in 1990 by Martine Rothblatt but officially became a big name in 2007 when it started being used in the production of popular cars such as Ford , Mercury , and Lincoln. Sirius is just a leading brand in satellite radio because it delivers absolutely the best quality service as I have personally experienced. Here is a picture of how dramatic the rise from 2007 to 2012 was in the Sirius XM radio stock. The EBAY Inc. Stock I chose EBAY as one of my stocks because I love ebay. Ebay is a great place to find really nice things for a really good price. Who wouldn’t want that ?!? Not only does it satisfy the public’s needs but it does phenomenal in the stock market. Ebay was founded in 1995 by Pierre Omidyar for the sole purpose of connecting people and trading goods and services. Ebay does so well because of the amount of partnerships it has with big names such as GM or Disney. Ebay is also used by certain stores who only sells things through ebay. Here is a picture of Ebay’s rise in stock prices from 2008 to 2012. The Netflix Inc. Stock I chose Netflix as one of the stocks for my report because I also love Netflix. All you pay is eight dollars a month for unlimited movies!! Its great! But , Netflix...
Words: 587 - Pages: 3
