Marketing Plan: Final Paper Essay Sample
Satellite Radio is the newest way for people to tune in to their favorite songs. With the music coming direct from the satellite to the receiver, there have been a multitude of advantages over regular AM/FM radio. XM has been a satellite radio provider since 1992. XM offers listeners continuous, commercial free music of their choice from 170 digital channels. The sound is crystal clear and listeners also have the choice of listening to live news, sports, traffic, weather, and talk programs (XM, 2007).
Satellite radio is the first big innovation in radio since the popularity of FM radio in the 1970’s. XM Satellite Radio was incorporated in 1992. On October 5, 1999 XM Radio stock was being publicly traded on the NASDAQ exchange. Currently XM radio receivers are being manufactured through some of the biggest names in electronics including Delphi, Panasonic, and Yamaha. The receivers can be found at Best Buy, Wal-Mart, Circuit City, and other independent dealers. The company has also connected Toyota, Honda, GM, and many other car companies to offer their product in over 140 models of cars (XM, 2007).
XM Replay Radio will promote through various mediums. Television, point of purchase and magazines is where XM will do most of their promoting. Television advertisement will be on USA, ESPN, SPIKE TV, and LIFETIME. XM will also focus on News television such as CNN and MSNBC. XM will advertise Replay Radio on major networks during the daytime hours. To effectively reach the target market, XM will focus on specific times and specific shows.
Point of purchase advertisements will have demos that take place in highly XM promoted areas of the retail store. XM Radio will provide training for the product to the retail salesperson in each store. They will be thoroughly trained to provide confidence and knowledge of our product. Magazines advertisement will be located in Sports Illustrated, Playboy, Army Times, Newsweek, and other related magazines.
August is the most powerful time for the XM Radio to come out with and promote this new product. The National Football League (NFL) and the NCAA football seasons are beginning. During football season, many people have to rely on radio to keep up with their favorite team. The sports fans are going to go wild with the new XM Satellite Replay Radio. XM’s goal is to make Replay Radio a must have item. The sports fan will never miss another play. XM also intends to focus on teenagers going back to school and being able to catch all the latest hits, not to mention the oldies but goodies for adults. XM Satellite Replay Radio will revolutionize the way people listen to the radio. The ads will hit nation wide television through cable network, as well as magazines nation wide, also the company will recruit pro basketball, football, and baseball players to help promote this product. The company will also target celebrities to get world involved.
The initial sell promotion schedule will start in the first part of August so that the company will catch the height of sports, shopping, and this is the time of new releases for television shows and the music artists are producing and on tour. This will peak toward the end of January, ensuring that a huge Christmas campaign is put into place. Another swing into sales promotion will begin in April to catch the beginning of Baseball season. Year round advertisements will be focused on holidays and other creative advertisement.
XM has many public relation opportunities that they can explore and benefit from in the market. One of them is XM’s relationship with automobile manufacturer General Motors (GM). General Motors lists XM satellite radio as an added upgrade feature on many of its cars and trucks. XM can offer the Replay Radio to GM for their cars and trucks at a bulk cost rate, which in turn will give GM an exclusive XM feature they can offer customers. XM will gain new subscribers, customers and a great deal of publicity through GM’s automobile marketing plans of this exclusive new product offered in their new cars. This relationship provides both XM and GM with marketable product options they can assist in building their market share. XM can also provide GM customers with XM SRR a discounted rate for purchasing the XM satellite radio accessories transferable from car to home.
The second public relations opportunity XM will have is through technological sharing with Sirius. XM and Sirius, being the only two companies in the satellite radio market, have a common goal to increase the interest in the market. The Replay Radio can help build the satellite radio market as a whole and in the long run can assist both companies. XM can offer Replay Radio to Sirius through technological sharing arrangement. Sirius could purchase the technology and use it to upgrade their satellite radio systems. However, this public relations avenue should probably be something that is explored after the XM reaches their expected market outcomes.
The market exposure that will effectively reach XM’s target consumers would consist of a mix of selective and intensive distribution. The best way to accomplish this is to distribute our products to those who will give it special attention such as Best Buy, Circuit City and Radio Shack. These retailers will be better at determining XM’s value and the advantages of purchase. To be of more convenience, Wal-Mart, Kmart, and Target will be added to the distribution. The brand identity has already been developed so consumers can relate quality audio with XM Radio.
Because XM Replay Radio does not plan to hold any inventory, XM will use an indirect channel system. Currently XM is partnered with existing audio manufacturers and car companies like Toyota, Honda, and GM. Having this relationship with car companies will help to get the product to the consumer. Toyota, Honda, and GM have agreed to install the new XM radio receivers in new cars which will allow XM to reach more consumers without them having to going out and purchase the XM receiver.
XM manufacturers will handle all transportation of all XM products. With online orders, the consumer will have the option of having the XM receiver shipped directly to them or to the nearest retailer for pick up and the cost of shipping and handling paid by the consumer. Packaging of the receiver should be done with great care. The XM receiver are valuable and fragile items and will be packed in bubble wrap be wrapped for protection of the product. However, it is essential for the handlers to use extreme caution in delivery of each product.
XM and the manufacturers have agreed to sell to retailers at a set price of $140 per unit. Retailers have the option of a 30% price markup on average, making the price to the consumers $182 for the receiver. The actual price of the receiver will depend on what the retailers actually mark the receiver for, as well as the model and make of the receiver. Currently the price for the subscription is at a set price of $15. Although subscription price levels are currently $15, XM hopes to gain an optimal share of the market, as Sprint has done in the cell phone market. XM will look at pricing our subscription prices similar to those in the mobile phone market. XM believes that by offering different subscription length and pricing consumers will have a longer contract, making XM Replay Radio more valuable to the consumer.
Generally, businesses devote at least 5% of sales revenue to marketing. Since Replay Radio is a new product, XM feels that more money should be committed to advertising and promoting the product. In order to be able to spread the word about Replay Radio’s new technology and gain a strong presence in the market, XM decided to devote 20% of sales revenue to marketing for the first year. After the first year is up, the budget will be reevaluated and revised according to the first year sales (Evans & Stroll, 2005).
A effective marketing plan involves narrowing down to a specific strategy “with quantitative and qualitative screening criteria”(University of Phoenix, 2004). There are several different strategies XM’s market manager and team can use these elements to evaluate, monitor, and control the effectiveness of the Replay radio marketing plan. XM plan is targeting customer strategy. They have established sports fans, teenagers, GM vehicle owners, and talk radio fans.
XM plans to use an S.W.O.T. analysis to help bring into focus the strengths and weakness of Replay Radio. The marketing team can use the analysis to focus on the areas of Replay Radio that will help to sell it to our potential target market. The team can use this analysis as a way to identify areas to avoid, that would not assist in making Replay Radio a success.
In order for XM to know the market potential and profitable of Radio Replay they must also forecast. This will give the marketing team a “estimate of sales, costs, and profits”(University of Phoenix, 2004 ). XM will develop this forecast based on how the company past history of XM radio products sold. We will also forecast using the number of people who currently use satellite radio as a whole. By developing the forecast this way XM will be able to look at the number of potential buyers it may currently have, as well as, the potential market for new customer interest. The customer trend in the interest of satellite radio and actual use will help us to understand what the customer need and expect from XM Radio Replay.
XM plans to monitor Replay Radio marketing plan with customer surveys and marketing test. This will assist XM in judging customer reaction to Replay Radio before and after it is put into the market. The surveys and marketing test will be a good way for the marketing team to make effective adjustments to the marketing plan as demanded to continue the success of the product.
In order to effectively control the Replay Radio marketing plan the marketing manager of XM will establish time tables on a flow chart that outlines when task should be implemented. The flow sheets will provide all members of the marketing team with the visual goals of XM Radio Replay marketing plan.
A computed sales analysis and profit margin statement on Radio Replay will be reviewed monthly and quarterly by the marketing team and manager. This analysis will be used with other methods to trend the changes in the satellite radio market and how much of the market XM is capturing with our new product. The information will be used to assist with management daily operational decisions and product policy implementation. The product policy will assist in maintaining and or recognizing when the Radio Replay marketing plan needs adjustments.
Marketing, businesses are accustomed to being criticized often for neglecting their responsibilities to society. Many complaints pour in yearly on private enterprises that put profit before people. Just recently in the past few years the concept of social responsibilities has increased and it is now part of a curriculum in many business schools of management. Social and ethical responsibilities being upheld is not just expected from large corporation’s only, commercial activities are now being perceived as unethical (Hood, 1996).
In recent years during marketing campaigns the average person encounters over 2000 ads everyday of his or her life. Whenever a product is being marketed the owner and the investors each have a vested interest in the marketing campaign. Ethics and social responsibilities are bound to arise and the moral principals and values that govern the actions and decisions of an individual or group. Ethics also serve as guidelines on how a company acts rightly and justly when they are being faced with such things as moral issues. Generally whenever ethical issues arise a within an organization they are obligated by law with society values and standards and these standards are enforceable in the court system. For example, judges play a big role in defining ethical and legal boundaries. In many cases actions that may appear to be legal could be viewed as possibly unethical and actions which are considered to be ethical could be viewed as legal (Merenski, 1999).
Many American consumers and business people are beginning to have very serious concerns over a growing epidemic of ethical environment in the United States. Approximately 58% of American citizens rate the current ethical standards of many U.S. businesses as either fair or poor. In other surveys approximately 90% of the people surveyed think that white collar crime is either very common or somewhat common. Management at Replay Radio anticipates that there will be some consumers who have issues with our product. For example, unethical practices on consumers are beginning to become a big concern with marketers. Filing warranties claims even after the warranty period has expired, coupon ad misprints, and returning merchandise. Either claim could cause marketers a larger amount of money being lost in revenue and prevention expenses. Replay radio executives are also looking into green marketing for the future. In an attempt to help with issues outside of our realm our marketing team has put together several campaigns to produce, and promote an environmentally safe product (Merenski, 1999).
XM’s marketing team is very excited about promoting the new Replay Radio technology this year. Many long hours have been spent working out a strong marketing plan. The marketing team took time to plan around the product life cycle, attributes, pricing, manufacturing, promotion, advertising, and public relations. Hopefully, all the team’s hard work will pay off and Replay Radio will be a success.
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