Case Study Analysis: Napster Changes The Music Marketing Mix

About Napster:

Napster was initially created in 1998-1999 as a peer-to-peer music downloading program for college students. However, on March 5, 2001 Napster was ordered by the U.S. court to stop trading copyrighted material. The following Year Napster filed for bankruptcy and was bought out by Roxio, Inc. Napster has since reopened its online doors for business. It now does business in Canada, the U.S. and the United Kingdom, has 410,000 customers, each of which pay ₤14.95 per month to get the right of use to 1.5 million songs. With the increases in technology, Napster has had to focus on new ways to attract customers and keep up with its competitors such as Apple. Because of this fast moving environment, the company has strategically varied its marketing mix to place itself in a position of growth.

The objective of Napster is “to continue to build the Napster consumer brand – as well as increase awareness of the Napster brand identity. Napster has a reputation as an all you can eat music service which is fun and affordable. These branding characteristics assist customers in recognizing Napster over other music retailers. Napster provides value to customers who want their music and electronic devices to be compatible. It provides a list of all devices compatible with its services on the company website.

Product of company:

Napster’s core product is music. The company offers unlimited access to 1.5 million songs to subscribers at a fixed price per month. It also offers mass customization through radio stations based on particular artists and recent consumer downloads, along with a page that lists recommendations from Napster. These additional features (part of Napster’s extended product) give the company an edge over competitors who only offer music downloads.

Price:
Napster offers a different pricing model than its competitors. Apple and other competitors allow “users to purchase songs on a per-track basis or in the form of albums”.Napster on the other hand offers simplicity with a monthly fee that allows users to download as many tracks as they can. There are many different ways that a customer can pay Napster for its service. Napster’s payments are made in advance “via credit card, online payment systems or redemption of pre-paid cards, gift certificates, or promotional codes”
Place:
Napster carries out all of its business online. The strategy of Napster is to become the leading global provider of consumer digital music services.
Promotion:

One way Napster promotes itself is through strategic partnerships. One of the company’s four key focuses is to continue to pursue and execute strategic partnerships. Napster believes that they must maintain and add to their strategic marketing relationships in order to be successful. Napster has entered into strategic partnerships online as well as offline. Some of the partnerships include Microsoft, Best Buy, Blockbuster and Target. Napster is able to use these partnerships to be innovative by investing in the new services and technologies that these companies develop.
These partnerships separate it from its competitors such as Apple. Apple in a way ocks people into purchasing Apple hardware because its services are only compatible with its own products . Because of its partnerships Napster is able to bundle its services with hardware manufacturers by creating a more widespread marketing campaign. The partnerships Napster has entered into help ensure that its services are compatible with the newest technology on the market. Napster also participates in traditional offline and online marketing. Napster markets offline with television, radio and print advertisements. The company’s online advertising consists of placing advertisements on a number of websites (including affiliate partners) and search engine. Both of these forms of advertising follow the company’s mission of marketing “directly to customers through an integrated offline and online marketing.
People:
Napster offers its services to anyone within the region that it operates in.Napster executives also stated that subscribers bought more music online than folk who buy one-off downloads and one in five of them no longer buy CD’s. This shows that their strategy of a once a month payment helps retain more customers than their competitors, who offer a pay as you go rate.
Process:

Napster does not directly participate in new product development since it does not sell products that it can develop. However, it is focused on being innovative with its file formats by investing in new services and technologies to encourage a wide range of platforms from portable MP3 players, PC’s cars, mobile phones, etc. This ensures that Napster will continue to be competitive because it is constantly in the growth stage of the product life cycle.
Physical Evidence:

Napster provides a unique online experience to its customers. The web site is tailored to making the customer’s experience easy and free of stress. Napster’s once a month payment to gain unlimited music downloading access, saves the user a lot of time and stress by eliminating a payment each time a purchase is made. The actual website of Napster is extremely easy to navigate through. The top of the page includes a list of tabs that helps the customer find their way around the site. This list of tabs prevents the customer from searching all over the site to find what they are looking for.Napster has a high-quality selection of features available. These features include Napster recommendations, Napster radio based around songs by particular artists, Napster radio playlists based on the songs you have downloaded and swapping playlists and recommendations with other users. These features, which are only available to subscribers, provide a personal touch and help the customer easily connect with his or her interests.