Spotify’s Positioning and Product Strategies
Topic 3: Positioning
Define the positioning of the company (must be clear, different, and relevant):
Objective
Spotify is positioned as an innovative and consumer-focused music streaming application providing music and podcasts. Spotify is priced slightly above mass-market competitors, but it is positioned as an affordable and high-quality brand, which is accompanied by discounts for its target market, such as students. This increase in perceived quality aims to win customer trust and loyalty.
Subjective
Spotify is perceived as a brand for millennials accustomed to technology. It is the most recognized streaming music brand in the sector. It has a solid subjective positioning in regard to its natural attributes and offers.
Ideal
The market wants Spotify to be seen as a music and entertainment brand, not a tech company. It underlines mostly its entertainment values and has built a human brand image, adopting a fun, humorous, and light-hearted tone (similar to its objective attributes) to be the most customer-centric.
What is the positioning strategy of Spotify?
More for the same, as Spotify gives you a better service, thanks to the extreme personalization of each customer’s experience, but with a similar price to its competitors.
Why could they use the positioning map for? To compare with competitors according to two or more variables in order to make marketing decisions and detect market opportunities.
Make an example of a positioning statement (target, category, brand difference):
Spotify is a streaming music brand for artists and anyone who wants to listen to music, that offers the greatest opportunity for artists to live off their art and fans the opportunity to enjoy it and be inspired due to the outstanding personalized experience that it will provide you.
Topic 4: Product
BCG Matrix for the Podcasts:
Spotify’s core music streaming service would be placed as a Star.
Podcasts represent a Question Mark in the BCG Matrix as it is in a high-growth potential market, and Spotify is introducing it with huge investments. At the moment, it has a resource-consuming position. They are investing a great amount of money to get a better position in the market for the coming years.
Define the portfolio management strategy line modification:
Width: There are two main product lines: music and podcasts (Free Account and Premium Account).
Depth: In the music line, you have the Free Account where you have limited songs, and ads are shown while you are listening to music. Here, the business comes from providing service to other companies to pay for ads. While in the Premium Account, you have unlimited songs, you can watch podcasts, and no ads are shown; there is a monthly payment. For podcasts, you only have the free account.
Consistency: The products inside each line are related to one another. In the music line, the service is the same but has different features (the main difference is that in the Free account, you don’t have to pay, but in the Premium, you have to pay on a monthly basis; with Premium, you can listen to music offline).