RMIT International University Vietnam
Bachelor of Commerce Program
Assignment Cover Page
| Internet for Business
Location & Campus (SGS or HN) where you study:
| RMIT Vietnam
| Title of Assignment:
| Case Study 3
| Nguyen Thi Xuan ThaoTran Minh TienVu Hoang AnhDang Huynh Phuc
| Student Number:
| Rupan Kanti Das
Assignment due date:
Date of Submission:
Number of pages including this one:
Napster offers music tracks that can be stored on customer’s hard disks in MP3 format. According to Chaffer 2009, this type of product is digital product which typically is information products that can delivered over the web. Napster differentiates itself from traditional music providers at the time when it offers customers convenience in finding and listening to music without putting efforts in go to stores to buy CDs. With the offer of 6 million tracks and a various kinds of payment online, Napster has gained competitive advantages over its competitors when applied technology innovation effectively. Besides traditional music providers, Napster also gets competitors from other online music providers like Apple iTunes and Amazon, however, while others charge money by each song, album customers download, Napster provides subscription service which requires customers to pay a fix amount of money in a month to listen as many track as they wish (Chaffey 2009). II. Promotion
Napster’s marketing strategy mainly focuses on building brand identity, particularly promoting the subscriptions service. They apply both offline and online methods: - Offline marketing program: Napster spots being run on TV (including VH1, ESPN, Comedy Central); print ads which target mass market publications, like Entertainment Weekly, Men's Health, Time; radio promotions and some outdoor posters and stickers (Elkin 2003). - Online marketing program:
They implemented some online communications tools:
1. Advertising: Napster put their ads on a number of search engines and web sites (including affiliate partners), such as preceding their TV spots on Web media for several months.
2. Sells promotion: they offer coupons and promotion codes (for 14 days free trial, or 5% off, etc.)
3. Public relations: they use social networks as a tool to communicate with customers (Napster Facebook and Twitter) 4. Sponsorship: in 2000 Napster sponsored a four-week summer tour of rap-metal band Limp Bizkit. Napster also bundles its service with Dell – buyers of Dell will be offered a full year’s Napster subscription, along with 60 free downloads (Yoskowitz 2009). By applying this strategy, Napster not only gains awareness from their partners’ customers, but creates a competitive advantage – high compatibility service in comparison with Apple iTunes (which only compatible with Apple products). Another promotion campaign that emphasizes Napster’s advantages over iTunes was ‘Napster-To-Go campaign’ (to promote for the Napster-To-Go portable subscription service).
In order to compete with traditional and online music providers, Napster has developed two approaches in pricing model including lower-prices and various payment methods. Napster offers lower price compared to their competitors such as Apple and other traditional providers. According to the case, subscribers are now only pay up to £14.95/month to gain access to 1.5 million songs. In contrast, it costs $0.99 per songs when purchasing on Apple iTunes. Moreover, Cohn and Vaccro (2005) claimed that prices at online downloading services are lower than acquiring CDs from traditional retail...
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