Sample Critical Thinking On As A New Product What Are All The Value Propositions That Xm Has The Potential To Offer,

XM Satellite Radio Case Study
XM Satellite Radio Case Study

relative to existing alternatives?
XM Satellite Radio is a digital satellite radio entertainment medium that brings to consumers a broad array of entertainment options not found on traditional terrestrial radio. The company was founded in 1992, and its only known competition at the time was Sirius Satellite Radio. XM knew that if it wanted to be competitive it would have to offer a series of value propositions to consumers that would stand out and create value over and above what Sirius had already presented to the market.
The first value proposition XM touched on was its ability to bring receiver signals both in a stationary and mobile way to consumers. These signals would carry over from state to state unlike terrestrial radio that loses signal when stations fall out of range. This gave consumers the ability to listen to radio content anytime, anywhere.
XM launched two satellites to broadcast its signal to provide redundancy in the event one satellite failed there would be no loss of service to users. In addition, taking advantage of the use of geostationary orbits helped to provide service all across the United States with the exception of Hawaii and Alaska.
Using a network of terrestrial repeaters throughout the U. S., XM was able to send satellite signals to these repeaters, reaching listeners in areas providing higher levels of service.
In order to receive these signals, listeners would need to purchase a small receiver antennae that could be affixed on a car or on any window. In their cars, receiving the XM signal was as easy as switching from an AM to an FM signal.
Perhaps the biggest value proposition XM wished to bring consumers was how to offer its service. In order to do this they studied the target market of listeners of their product and what they were listening to. They strived “on understanding the radio listening habits of potential consumers as well as on forecasting demand for satellite radio among key demographic groups” (XM Satellite Radio, n. d.). They also studied consumer radio listening habits in the car and on the home front. They wanted to remain competitive with their rival Sirius, who charged a monthly subscription fee. It was a matter of deciding to mirror what Sirius had already done or turning to advertising as a means to pay for its service. Another aspect was keeping the cost of the satellite receivers minimal and affordable for consumers.

What are all the relevant consumer segments for XM?

XM targeted its services to several different age and cultural demographics that were based on several factors. XM would need select the target segment, determine the competitive offerings of Sirius Satellite Radio, and determine which differentiations were key. Additionally, they would need to pay attention to the choice and preferences of a given market share.
As a result, XM created their channel line-up based upon these factors. There were 15-20 channels that were targeted to the young adult market. For the 35-54 year old target audience who also happened to be tech savvy, there were about 5-10 special channels created that offered popular content. They also created niche channels that consisted of 1-3 channels that were “developed to fit with the desires and lifestyles of key segments such as African Americans, Hispanics, business people, or interstate truckers” (XM Satellite Radio, n. d.). By creating specialty channels in this way, XM hoped to reach a broader audience while reaching target markets and providing a balance that would give listeners a sense of personal service and satisfaction.

Reference

XM Satellite Radio (A). (n. d.) [Case study].
References
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