Problem/Issue
Statement
Problem: Pandora needs to come up with a marketing strategy
that would give them a profitable margin.
-
Pandora’s
advertising sales is not bringing enough revenue
-
Pros/Cons compared to other radio stations
o
Pros
§
Pandora played songs that users were likely to
enjoy based on other musical selections
o
Cons
§
Listeners were not able to request a particular
song
§
Unable to record songs played
Situation
Assessments
Pandora needs a marketing strategy that would keep them
differentiated, but at the same time bring more revenue into the company.
-
Criteria
o
Cost
o
Stay differentiated
o
Give options to the customers.
§
For example) Still have somewhat of an option to
be a “free” Pandora customer
List of Plausible
Alternative Courses of Action
-
Add more advertising
o
More advertising turn users away from the
product
-
“Freemium” Model
o
Provide limited but free service to all users
o
Offer a premium-priced value-added membership
for value-added membership
-
Implement a subscription model
o
$3 per month per member
o
Ultimate debate: What is the nexus of what users
want and what the economics will allow
-
Capping the listening hours and charging only
those who went over the limit
o
After 40 hours, pay $0.99.
Recommendation
Quality and Logical Recommendation:
-
Quality Recommendation:
o
Go with “Freemium” Model or charging only those
who went over the limit
§
These two options are a good recommendation that
would bring Pandora profit
§
The two recommendation gives users the option to
be a free user, which will not turn users away
-
Logical Recommendation
o
“Freemium” Model
§
Even though, charging only those who went over
the limit is a very good option to have and bring in some extra revenue, it has
it’s disadvantages
·
“Freemium” Model gives you somewhat of a
constant revenue giving Pandora an estimate of how much revenue will be coming
in throughout the year.
·
Extra time charging option needs to have people register
their credit card information before hand or every time they go over, which
might have a negative effect on new and old users.
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