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Business analysis of Napster

Paper Type: Free Essay Subject: Marketing
Wordcount: 2247 words Published: 18th Apr 2017

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This report will provide a comprehensive analysis of case study “The re-launched Napster changes the music marketing mix”. (Chaffey et al, 2009, pp.319) The report will analyse this sharing files website called Napster through the marketing mix 7Ps, including product, price, promotion, place, people, process and physical evidence. It will also examine Napster based on additional research. According to the analysis, appropriate and recommendations are required to make in order to improve the understanding and communicate with their customers.

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1.2 Napster Introduction

Today, Napster is a legal website providing the ultimate digital music service, offering MP3 downloads and unlimited on-demand streaming for subscribers. Napster is the smartest and easiest way to discover and enjoy music while building a meaningful permanent music collection. (Napster, 2010) There are the competitors providing for online music services in the US same as Napster such Apple Computer’s iTunes, Amazon.com, RealNetworks, Inc.’s Rhapsody, Yahoo! Unlimited, Sony Connect, AOL Music, MusicNet and MusicNow. (Chaffey et al, 2009)

In 2005, Napster believed that the main competitive factors have affected their market share including programming and features, price and performance, quality of customer support, compatibility with popular hardware devices and brand. The online music download environment has also changed with legal music downloading propelled through increasing adoption of broadband, the success of Apple iTunes and its portable music player, the iPod which by 2005 had achieved around half a billion sales. (Chaffey et al, 2009)

BBC (2005) estimated that the global music market is now worth $33 billion (?18.3 billion) a year while the online music market accounted for around 5% of all sales in the first half of 2005. Napster (2005), quoting Forrester Research estimates that United States purchases of downloadable digital music will exceed $1.9 billion by 2007 and that revenues from online music subscription services such as Napster will exceed $800 million by 2007.

In 2008, Napster expected to exceed $125 million in the financial year with representing growth of 17% in the US market. (Chaffey et al, 2009)

2.0 Background

Napster was born by American teenager who has called Shawn Fanning, created a program to find music download for his friend while his studying in Boston’s Northeastern University, California and was first launched in 1998-1999. The teenagers has invented a new technology the sharing of music and movie files in peer-to-peer exchanges without cost on the internet around the world and became very popular with 26.4 million users in 2001.

Napster had not spent huge amounts on marketing or advertising space, but by using word-of-mouth methods to create a buzz about their service. In the meanwhile, the Association of Business Music of America filed civil court of methanol Africa Napster piracy in the music of later on March 2001, civil court judgment of the United States was that Napster’s infringement of the actual camp tapes and an order to shut down the service with the Napster on July 2001. In 2002, Napster was purchased and became part of manufacturer’s software Roxio and re-launched in 2008 with legal for downloading music online. (Chaffey et al, 2009, pp.319-320; Napster, 2010)

Advantage of Napster:

Help to find and download music in MP3 from internet with accurate and diverse. Because the system has community of sharing files between users.

Easy to use, just download the program.

Disadvantages of Napster:

Download the music files from the Napster, it’s a piracy and against the law.

When loading multiple files simultaneously, it causes the speeding download to be slow.

3.0 Napster’s Marketing Mix

3.1 Product

Product is the most important concept in the marketing mix, which defined as characteristics of a product, service or brand. It is a complex bundle of benefits that satisfy customer needs. (Solomon et al, 2009, pp.392) Napster has a core product is music. Napster offers unlimited access within the catalogue of over 1.5 million songs to subscribers so they can listen to as many tracks as they wish at a fixed price per month. Napster also had features available such as radio stations based around songs on particular artists and recent songs list based on customer downloads and recommendations songs list from another subscribers. (Chaffey et al, 2009) These additional features are the competitive advantages over the competitors who provided only music download.

Napster has a logo under their company name (See picture 1.0) to describe that anyone listens to music. This is one of other objectives to build the brand name as well as increase awareness of the Napster brand identity.

(Picture 1.0)

Source: Napster, LLC., 2010, Napster To Go, https://sms.napster.com/ns/login/

3.2 Price

The price element of the services marketing mix is dominated and must be determined by what is being charged for a services offering to customers. (Solomon et al, 2009, pp.392) Napster offers subscribers pay up to 14.95 Euro each month to gain access to about 15 million songs available that allows members to listen to music as many songs as they can within catalogue and discover new music through personalized recommendation tools (See picture 2.0) but the competitors such Apple allows user to purchase songs on each track basis or albums. (Chaffey et al, 2009, pp.320-321)

(Picture 2.0)

Source: Napster, 2010, Napster Press Room: Screenshot http://www.napster.com/press_room/ExploreBillboardCharts.jpg

However, Napster provides several ways for their customers to pay the services via credit card, Bpay and promotion codes which convenience and make them innovative provider as competitors have the similar services. (Chaffey et al, 2009, pp.320-321) Moreover, the subscribers need to pay $15 of the songs are to be transferred to a portable music player for their own. (Napster, 2010)

3.3 Promotion

Promotion represents the various aspects of marketing communication that the benefits of a product or services to the selected target market through communicating channels such as advertising, sales promotion, public relation, interactive marketing, direct marketing and personal selling. (Lovelock et al, 2007, pp.28; Solomon et al, 2009, pp.283) Napster has built brand identity by participates in traditional offline and online marketing to increase the consumer awareness and perception directly as its mission. Napster markets offline channels include television, radio and print advertising. Napster online marketing program consists of advertising placements on the number of website that including affiliate partners and search engines such Google. (Chaffey et al, 2009, pp.321)

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Napster allowed some of partnerships doing innovation by investing in new services and technologies for its strategic including technology companies such Microsoft and Intel, hardware companies such Dell and Toshiba and retailers such Best Buy, Dixons Group and Target that these companies route to innovate and develop. Napster also is able to bundle its services with hardware manufacturers by creating a more widespread marketing campaign to ensure that its services are compatible with the newest technology on the market. (Chaffey et al, 2009, pp.321)

In present, Napster has a new promotion on their website for exist customer by referring friend to subscript with Napster and would earn $5 for every paid new subscription without trails or conversion. Napster offers new subscribers 15 songs of MP3 downloads and unlimited streaming for $15 for 3 full months and “without any restriction MP3 downloads are playable on any compatible device, including iPods®, iPhones® and computer.” (Napster, 2010)

3.4 Place

Place is the distribution method that shows the role of location as determinant attribute of consumer choice. (Solomon et al, 2009, pp.393) Napster is online business that provides a music service through website with objective of Napster is to become “the leading global provider of consumer digital music services”. Napster is currently launching in the United States, Canada and the United Kingdom. Moreover, Napster has retail partner in UK where the services provide the prepaid card is Dixons. However, the company is looking an opportunity to expand the services in Japan through partnerships. (Chaffey et al, 2009, pp.320-321)

Napster needs to focus on localisation because to continue in competition with competitors of selling music that involves tailoring of web site information for individual countries or regions. Each country has concerned about different product needs, language differences and cultural differences but Napster has a solution by language differences and cultural differences provided. (Chaffey et al, 2009, pp.320-321) Unfortunately, Australia isn’t in the plan list of future services at the moment but may visit to get information on their website at http://www.napster.com/. (Napster, 2010)

(Picture 3.0)

Source: Napster, LLC., 2010, Napster To Go, https://sms.napster.com/ns/login/

3.5 People

The people are the intangible nature of services resulted and one element of the marketing mix in delivery effective customer services that satisfy customer’s needs and helps to build their long-term loyalty. (Solomon et al, 2009, pp.393) According to Napster that offers the services to country where area it operates. In 2005, the company reported that Napster had around 750,000 subscribers in United Kingdom since the service launched in May 2004. The register reported that 80% of its subscribers are over the age of 25, half of them have kid and most of them are male. (Chaffey et al, 2009)

(Picture 4.0)

Source: © Alexa Internet, Inc., 2010, The web information company: Napster, http://www.alexa.com/siteinfo/napster.com

According to © Alexa Internet, Inc. (2010) reported (See picture 4.0) that mostly male age in between 25-44 years old without children, they trend to buy more music in MP3 files online in 2010. There were visitors up to 47,320 clicks on Napster.com last July in 2010. This consumer behaviour showed that more people purchase their music online. Napster strategy was, to have enough employees to support the company’s services as its growth business.

In 2005, Napster hired 135 employees, included 10 workers to support the online music service which are maintaining content and providing customer care, 25 workers in sales and marketing department, 63 employees in engineering and product development and finance, administration and operations had about 37 working in these section. (Chaffey et al, 2009) These employees must meet the job requirement of Napster’s management to responsible, support and quality work in each area to meet the customer satisfaction and reduce the possibly problems. For example, enterprise application developer needs to have experience at least 5 years with web based API development is highly desirable both on the consumption and provisioning ends of the spectrum and must have degree at least BS in computer science or mathematics. (Napster, 2010)

3.6 Processes

Lovelock et al. (2007) advised that service delivery involves processing of business services that are the process, procedures and performance in providing services to clients with regard to customer satisfaction.

(Picture 5.0)

Source: Napster, 2010, Napster Press Room: Screenshot http://www.napster.com/press_room/NapsterHome_Musiceverywhere.jpg

3.7 Physical evidence

Physical evidence or servicescape is the tangible component of the service product offering as defined as the environment in which the service is delivered and the customer interact about the quality of the service they receive. This can be critical to the ultimate success or failure for the business. (Ivy, 2008; Lovelock et al, 2007, pp.309) According to Napster’s web site, Napster provides a unique online experience to visitors and customers for 24 hours 7 days a week that are tailored to making easy understand and interest to explore. The website also has company information, explanation of how its management, job offer available for who seeks to work and customers support for new and current of Napster subscriber with frequently asked questions available or give a feedback by sending an email. (See picture 6.0) (Napster, 2010)

(Picture 6.0)

Source: Napster, 2010, Customer Support – FAQs, http://napsterus.custhelp.com/cgi-bin/napsterus.cfg/php/enduser/std_alp.php?p_sid=26wJGX6k

Moreover, Napster has a high-quality selection of recommendation features available providing a personal touch and help to connect their interests such as radio stations based around songs on particular artists and recent songs list based on customer downloads and recommendations songs list from another subscribers. Finally, Napster subscribers are paid to download music in advance via credit card and online payment systems that convenience, safe time and secure. (Chaffey et al, 2009)


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