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Xm satellite final0
XM Satellite Radio launched in 2001 with over 100 channels of content. It formed partnerships with companies like GM and Sony to help distribute receivers. Market research found high customer satisfaction, especially regarding sound quality and lack of commercials compared to traditional radio. XM aims to target customers who spend significant time in their vehicles. Its strategy is to position itself as the "ultimate radio experience" through nationwide retail distribution and large advertising campaigns.
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Xm satellite final0
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- 2. 1 Introduction 2 SWOTAnalysis 3 Targeting 4 Positioning Contents 6 Forecasting 7 Conclusion 5 4 PCs
- 3. Introduction XM Satellite Radio,Inc. By the end of 2003, XM expects to have more than 1 million signed up with each subscriber paying $9.99 per month after purchasing a $300-500 receiver. XM Satellite Radio, Inc. was founded in 1992, but didn’t hit the airways until September 25th, 2001 with its first broadcast in San Diego and Dallas / Ft. Worth. . XM runs programming on 100 different channels offering content from that found in the mainstream to content targeted towards niche segments like disco, comedy, and blues. .
- 4. XM has formedstrategic partnerships with General Motors, Sony, Clear Channel Communications, and Direct TV, trading equity in exchange for the benefits they are able to provide to XM Radio’s business model. XM will require 7-8 million customers to reach breakeven on an operating cash flow basis, which many forecast XM to achieve in 2005 or 2006.
- 5. WS 1. The receiverXM is about 400$ which is expensive.1. For only 56 days, XM has over 30,000 subscribers. 2. XM is compatible with all type of existing car radio. 3. A 100$ million advertising campaign . Included TV, radio, magazines, News papers, direct mail, outdoor and online advertising. 4. XM aired 71 music channels more than 30 of them are commercial free. limited Ads. (2-4 min. per hour on some music channels. 5. (7-9 minutes per hour on third party programming channels like CNN. 6. About 35 channel are commercial free. 7. Most affordable than SIRIUS. 8. Reaction to XM service is range from very good to fabulous. (Telephone survey) 9. Retailers are more excited about the market potential for satellite radio than any other mobile electronic products. 10. Fees are less than SIRIUS by 3$/Month. SWOT TO 1. 9/11 terrorist attack. 2. SIRIUS has 60 music channels commercial free. 3. SIRIUS has strong relationships with retail, electronics and automotives partners. 4. Completely original music programming. 5. AM and FM are free. 6. Satellite radio , cable radio and internet radio have a large audience. 1. Very potential market. 2. Large sectors of customers spend more than 1 hr driving. 3. Rapid growth market.
- 6. United Sales InThousand 2.83.4 7.88.6 30 0 5 10 15 20 25 30 35 SACD & DVD Audio (2000) TIVO (1993)CD Players (1983) DVD Players (1997) XM Satellite Radio (2001) Distribution of XM subscribers as of January 2002
- 7. XM Radio CustomerSatisfaction of 100 Early Adopters (Dec.2001) ExcellentGoodOkPoorVery PoorElement 94%5%1%Overall Rating of XM Service 92%7%1%Rating of SoundQuality 88%9%2%1%Rating of Signal Strength/Coverage 88%11%1%RatingThe Price/Value at 9.99$ XM satellite radio launch advertisements (Sept-Nov. 2001)
- 8. Very Smooth Good Ok/Minor Delays InconvenientA Big HassleElement 82%2%11%3%2%Ratingof the activation process XM Has Far Fewer Commercials XM Has Fewer Commercials About The Same XM Has More Commercials XM Has Many More Commercials Element 85%13%2% Radio rating of the installation process No Comparison/ XM Clearly Better XM Better The Same AM/FM Better AM/FM Much Better Element 93%6%1%Rating of XM compared to regular radio Very Smooth Good Minor Problems Many Problems Terrible Problems Element 86%4%8%2%Radio rating of the installation process
- 9. Differentiation Strategy Targeting The target marketsegment we will serve is: • Adults from 18th to 50th. • Truck drivers and RV owners. • Commuters driving more than 90 minutes per day. • Business traveler who spend much of their time in the car. Like a real state sales agent. • Workplace listeners. Includes places needs non stop music such as outlets and restaurants. • Residents of undeserved rural areas. These target group spend an extraordinary amount of time listening to radio, especially in the car.
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- 12. Product K EY FE AT U R E SSatellite XM receiver Customer
- 13. • XM radiois a brand new way to listen to radio. • XM radio is a service. • XM radio includes 100 channels. o 71 music channels (more than 30 of them are commercial-free). o 29 are news, sports, talk, children's, and comedy channels. o The amount of time used for commercial ranged from 2-4 min. / hr for music channels and 7-9 min/hr for news, talks and sports channels. The amount used to partially fill the gap in third party programming that were left specially for advertising. XM filled the remaining gap with the announcement of internal programming and news. • The sound quality and signal strength are very good. • The installation and activation process are very smooth.
- 14. The packages Basic package Premiumpackage XM Radio Includes all channels except the 30 Ads. Free music channels. Includes all channels
- 15. • The targetmarket will be North America. • Use local and national retail stores as distributions channels. Chains like Best Buys and Circuit City have a large no. of stores nationwide. Place XM Satellite• Strategic partner for manufacturing and distribution channels such as: Partner with manufacturing of aftermarket car radios such as Sony, Pioneer and Alpine. Partner with OEM companies (original equipment manufacturer) such as Delphi Delco in order to include XM receiver as factory installed in new vehicles.
- 16. • 100$ millionadvertising campaign. • The campaign included TV, radio, magazines, newspaper, direct mail, outdoor and online advertising. • The agency TBWA/Chiat/Day created the campaign: X_M radio the power of X. the campaign branded XM as the ultimate radio experience and used a series of artists-BB King, Snopy Dog and David Bowei. Promotion XM Satellite • The campaigns have two main goals To educate the customers, how to use and how XM is differ from regular AM and FM radio. To differentiate XM from SIRIUS.
- 17. LOGO Price Future Of Radio •Price of the receiver is about 400$. • Price of subscription for basic package is about 9.99$/m. • Price of subscription for the premium package is about 12$/m.
- 18. LOGO ForecastingTo reach 8million customers Forecasting
- 19. LOGO Conclusion • XM Radiois adding value to customers who spend much time in their cars and customers in rural area that lake from variety of entertainment. • XM Radio is differentiated from regularly AM and FM radio because it has 30 music channel commercial free and the rest is limited Ads. • XM Radio is differentiated from SIRIUS because it is more affordable. And lower pricing structure.
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