ASSIGNMENT ON INTERNATIONAL BUSINESS group assignment spotify

FPT UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION ASSIGNMENT ON INTERNATIONAL BUSINESS Group Assignment: Spotify Teacher Course Title Course Code : : : Hoàng Thị Hồng Hạnh Marketing Principles MKT101 Group Members NAME: Đào Minh Sơn Lưu Hà Duyên Lương Vân Anh Nguyễn Phong Lưu Nguyễn Hoàng Dương STUDENT ID: HS176140 HS170017 HS170059 HE163190 HS170100 Hà Nội, 03/2022 TABLE OF CONTENT B Theoretical Basis I Business’s environment analysis The marketing environment is made up of external actors and forces that have an impact on marketing management's capacity to develop and sustain successful connections with target customers Companies, like Kellogg, must constantly monitor and adapt to changing conditions—or, in many cases, lead those changes Marketers, more than any other group in the firm, must be aware of current environmental trends Those who are on the lookout for new opportunities are known as trackers Despite the fact that every organization's manager should Marketers have two distinct abilities They must be aware of their surroundings They use rigorous approaches for gathering information and producing insights about the marketing environment, such as marketing research and marketing intelligence They also invest More time spent with customers and competitors Marketers can change their strategy to meet new market difficulties by carefully monitoring the environment Micro environment The company, suppliers, marketing intermediates, customer marketplaces, competitors, and publics are all near to the firm and have an impact on its ability to service its customers Macro environment Demographic, economic, environmental, technical, political, and cultural influences all have an impact on the microenvironment II Marketing Mix ( The 4Ps ) The four Ps of marketing are the key factors that are involved in the marketing of a good or service They are the product, price, place, and promotion of a good or service Often referred to as the marketing mix, the four Ps are constrained by internal and external factors in the overall business environment, and they interact significantly with one another The Ps are used by companies to identify some key factors for their business, including what consumers want from them, how their product or service meets or fails to meet those needs, how their product or service is perceived in the world, how they stand out from their competitors, and how they interact with their customers Product Product refers to a good or service that a company offers to customers Ideally, a product should fulfill an existing consumer demand Or a product may be so compelling that consumers believe they need to have it and it creates a new demand Price Price is the cost consumers pay for a product Marketers must link the price to the product's real and perceived value, but they also must consider supply costs, seasonal discounts, and competitors' prices Place When a company makes decisions regarding place, they are trying to determine where they should sell a product and how to deliver the product to the market The goal of business executives is always to get their products in front of the consumers that are the most likely to buy them Promotion Promotion includes advertising, public relations, and promotional strategy The goal of promoting a product is to reveal to consumers why they need it and why they should pay a certain price for it III Marketing Objectives Targeted Customers Target means identifying the target audience and market, identifying the group of people who share the most common characteristics and interests in your product for the purpose of serving the implementation of your marketing strategy and business strategy company Simply put, target is the analysis of the audience that your business needs to target Strategic Objectives Strategic objectives are the big-picture goals for the company: they describe what the company will to try to fulfill its mission Strategic objectives are usually some sort of performance goal—for example, to launch a new product, increase profitability, or grow market share for the company’s product IV Marketing Orientations This report is conducted because of the lack of profit from Spotify The purpose of this report is to analyze Spotify’s current situation and identify actions that can be made in order to make Spotify Profitable Spotify is the world leader in music streaming service According to Reuters, Spotify has the market share of 44.77 billion dollars in 2021 However, due to the Covid-19 pandemic, it dropped to 26.54 billion dollars in 2022 Its biggest strength are market share and its growth that has been sustainable since the service was launched in 2008 The music streaming overall has been riding high for the past few years and it should keep it that way even though its growth will not be as impressive as it used to Spotify’s business model is quite the same as its competitors The only main difference is the possibility to listen to music for free, with some limitations, offered by Spotify This offer makes Spotify attractive for neophytes that would like to try a streaming service before paying for it This slight difference is not enough to give Spotify a significant competitive advantage though A INTRODUCTION - Spotify is a Swedish audio streaming and media services provider - Founded on 23 April 2006 by Daniel Ek and Martin Lorentzon - A freemium service, basic features are free with advertisements and limited control, while additional features, such as offline listening and commercial-free listening, are offered via paid subscriptions - Users can search for music based on artist, album, or genre, and can create, edit, and share playlists - The service is available on most modern devices including Windows, macOS, and Linux computers, IOS and Android smartphones and tablets, AI-enabled smart speakers such as Amazon Echo and Google Home, and digital media players like Roku - The largest music streaming service providers with over 406 million monthly active users, including 180 million paying subscribers, as of December 2021 - Spotify is currently available in 180+ countries as of October 2021 C REPORT’S CONTENT I Business’s environment analysis 1 Macro Environment 1.1 Political Environment Vietnam's politics is considered to be stable, and the State of Vietnam always advocates the implementation of a foreign policy of independence, self-reliance, openness, diversification and multilateralization of international relations , actively international integration * Opportuinity: Vietnam with the trend of constantly expanding and developing, creating opportunities for foreign enterprises to develop and invest in Vietnam 1.2 Legal Environment - Vietnam currently does not have any online music platforms that are fully licensed, especially in the context of copyright being focused - Musicians and singers also want a platform for them to collaborate and get paid to share their music with users * Opportunity: - Having the opportunity to develop into the leading comprehensive copyright music player application in Vietnam - Bringing connection between listeners and artists 1.3 Economic Environment - Vietnam is currently a low-middle income but continues to grow - GDP in the first months of 2021 increased by 5.64%, higher than the growth rate of 1.82% in the first months - In 2020 but lower than the growth rate of 7.05% and 6.77% of the same period in 2018 and 2019 *Opportunity: - With Vietnam's deeply integrated economy, Spotify can be said to be welcome when entering the music market, listening to music online - The music industry has been affected by Covid-19 due to the inability to hold live events, declining album sales, and more The music industry will have to rely on music streaming platforms like Spotify => So, Users will increase a lot and pay more to use online platforms 1.4 Technological Environment - On May 11, 2021 in Hanoi, Appota Group - a digital entertainment technology company officially released a market report: "Mobile applications 2021": Vietnamese people are tending to download and use more mobile applications after the pandemic Specifically, each person spends an average of 5.1 hours using mobile applications, an increase of 25% compared to 2019 - The percentage of users accessing social networks very early, specifically from level 1, level and above *Opportunity: - Having the opportunity to approach a young, dynamic and skilled customer base in technology - Developed technology and online payment platforms, helping customers make purchasing and payment decisions easier and more convenient - Easier to develop technology-based marketing strategies 1.5 Cultural Environment - Vietnam has a young population structure, a group of people with a dynamic personality, easy to receive and adapt to new trends Moreover, a group of young people spend a lot of time using electronic devices such as laptops, smartphones and televisions during the day, they are very easy to access to applications and services on digital platforms - Likes to consume new products, when encountering advertisements, curiosity will be stimulated to learn information about products * Opportunity: Vietnam is a country free of beliefs and religions, so the distribution and promotion of products not face many difficulties Micro Environment 2.1 Company Budget accounting: Spotify's maintenance cost accounts for 70% of revenue, of which 55% is to pay for the issue of buying music rights from artists and entertainment companies, 10% for the development and maintenance of the platform The remaining 15% is used for promotion activities => Spotify has abundant financial resources and is quite invested in Marketing activities However, in the Vietnamese market, marketing strategies, especially promotion, should be advertised more carefully so that Spotify can exploit this potential customer market Information system - With more than 10 million users listening to music every day and 271 million users worldwide - Spotify holds a huge amount of personal information, Data about music preferences, favorite keywords, song data listening, geolocation based on the device they use most when listening to music, and more => Many artists have even collaborated and paid Spotify to have their songs brought to users The same goes for brands that partner with Spotify to launch advertising campaigns on this platform 2.2 Suppliers - supply chain consisting of parties: Artist/Entertainment - Spotify - Customer (music listener) - Spotify acts as a distribution intermediary between artists and music listeners, so distribution control is also two-way - Due to its nature as a distribution intermediary, Spotify has a close relationship with both parties - Building a close relationship is a priority for Spotify, reflected in its terms, copyright policy or privacy policy to create trust with artists and music listeners 2.3 Marketing Intermediaries - In order to bring its music streaming service to market, Spotify focuses on its existing connections with social networking platforms (Facebook, Instagram, Twitter, LINE) , ) to run ads - Through third-party providers, Appstore and Playstore, to provide services to customers 2.4 Competitors Apple Music, amazon music, youtube music, gg play music, pandora, SoundCloud, Napster, tidal II Company’s marketing mix Product In addition to providing consumers with copyrighted music products, Spotify has been developing a plan to provide users with not only a pure music application but also a place to listen to music Users can share playlists and their personal music tastes with friends, family, and even strangers A platform that is both a music application and a music social network, designed to not only address the needs of personal music listening but also to provide a space for entertainment and sharing in order to build a cohesive, high-quality music community 1.1 Features of products and services provided - Podcast service, which not only provides music, but also audio series, including music and stories, which users can share and post on the Spotify platform - Spotify is also a Music Social Network, users can create playlists of their favourite music and share with friends via social networks Facebook and LINE At the same time, they can also share their favourite music files to the Instagram or Facebook story feature - Daily Mix ( bring together your recent listens with other tracks to keep you engaged ) - Release Radar ( is a playlist of new releases that updates every Friday Listeners get new music from artists they follow and artists they listen to ) - Discovery Weekly (a playlist developed based on user listening behaviour) 1.2 Spotify's Visual Platform Spotify's intuitive platform design is minimalist, eye-catching, convenient and easy to use for users How to arrange playlists is easy to see and find With many features and eyecatching interface design, Spotify will stimulate users to discover more about this application 1.3 Bundled Features Content filtering function, music can be integrated to play on a variety of devices, including phones, laptops, tablets, speakers, TVs and even cars Price Currently, in Vietnam, Spotify has only launched two of its paid product packages: Mini and Individual, aimed at highly individual users - Premium Individual package: 59,000 VND/month, compared to $9.99 in foreign markets, this is a much cheaper price, with the aim of reaching more users because Spotify has only appeared in Vietnam not long ago - Premium Mini package: 2,300 VND/day, 8,800 VND/week, a very cheap price Place Because it is a technology product, an application on the operating systems of phones and computers, Spotify uses the same distribution channels as other technology products: Appstore on IOS operating system, CH Play on Android operating system and Microsoft store on Windows operating system Since businesses already charge users to use the software, downloading the app will be completely free 4 Promotion 4.1 Advertising Currently, Spotify's promotion activities are mainly aimed at running ads, Spotify running ads on the most popular social networking platforms in Vietnam, Facebook and Instagram Posts running ads aim to highlight the features Spotify's feature, or to announce a new product package, 4.2 Sales promotion activities To increase sales, Spotify has offered a free one-month premium trial for new registered accounts When Spotify is new to the Vietnamese market, this trial package program will help users better understand the product, discover its superior features, and enjoy a personalized music listening experience for a month After that, when returning to the normal free account, the functions are limited such as: - Cannot get notifications, can't quickly update the latest songs - Forced to use random music mode - Forced to watch ads, music listening experience is interrupted, annoying - Normal music quality - Can only change songs times per hour => This will help Spotify encourage and motivate users to switch to Premium packages for unique, personalized music listening experiences 4.3 Public Relations - PR activities of businesses in Vietnam mostly focus on activities on their Facebook Fanpage for the Vietnamese market with content aimed at introducing new features, product packages or posts promoting new songs by Vietnamese artists - At the same time, Spotify also runs community-oriented programs For example, on World Mental Health Day, Spotify created a playlist specifically for this event, showing support for mental health issues in the community, - Community activities: Spotify donated $10 million to racial equity organizations, $20 million to global organizations supporting creators financially successful by COVID III Marketing Strategic objectives and orientations Marketing Objectives 1.1 Targeted Customers * Demographic: - Age 18-34 (Generation Z and Millennials) - Geographical location: Living in big cities, so they have a high standard of living, are more aware of music copyright issues - Income: Customers in this age group are students and working people, most of them have their own incomes and separate bank accounts * Behaviour: - Ability to approach and understand high-tech equipment - Know how to use and have the habit of making online payments through digital banking platforms or e-wallets - Concerned about music copyright issues * Shopping habits: - Willing to pay more for reputable manufacturers, applications and for modern, superior features - Customers aged 18-34 often like to express their ego, so they choose products according to their personal preferences and have a habit of searching for information on social networks before making a purchase - Because people in this age group begin to interact and participate in many social activities They love to meet and socialize Therefore, the buying decision of this customer group will be greatly influenced by the reference group of friends and colleagues ⇒ Spotify can take advantage of this feature to take advantage of Word-of-mouth * Online habits: - The social networking channels commonly used by this group are Facebook, Instagram, Tiktok… - Spend an average of nearly hours a day online Due to the publicity of social networks, communication messages will be easily accessible to this target group 1.2 Strategic objectives: - Spotify has the following mission statement :Our mission is to unlock the potential of human creativity—by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it - Focus on personalizing customer experience: Through personalizing the user experience by leveraging data and technology, Spotify can attract customers and gain a competitive advantage over an opponent - Take advantage of the Freemium strategy: When using the free version, users can listen to music and access a variety of music playlists However, they will often be bothered by ads and have to listen to music randomly Therefore, users will need to pay for the Premium version to get a better music listening experience - Using technology and data: Thanks to the technology of analyzing user data profiles, Spotify has developed strategies to increase their users significantly Marketing Orientations * Strategic Plan: Spotify’s main intensive growth strategies are market development and market penetration These two strategies are simultaneously applied in order to strengthen the company’s competitive position as the biggest and leading music streaming business in the global market Based on the Igor Ansoff Matrix, market development aims to further expand Spotify’s service availability to more countries and regions On the other hand, market penetration is an intensive strategy that aims to grow the number of users of the on-demand music streaming service in existing markets where the company already has operations Market development and market penetration provide competitive advantage to Spotify’s operations based on economies of scale, while also supporting the network effects business model and the network orchestrator business model: as the population of artists and subscribers grow, the music-streaming platform becomes even more beneficial and valuable to the artists and subscribers In addition, these intensive growth strategies increase the cost leadership generic strategy’s effectiveness via economies of scale The application of these intensive growth strategies requires related changes in Spotify’s organizational structure, as more business offices or locations are added Product development is also applied as an intensive strategy for Spotify’s growth For example, the company develops and introduces new products, such as new apps and music-related services, sometimes with the involvement of business partners via new alliances D RECOMMENDATION E REFERENCES LIST I Brief Introduction https://en.wikipedia.org/wiki/Spotify II Business’s environment analysis Technological Environment https://appota.com/report • • Economic Environment https://www.gso.gov.vn/du-lieu-va-so-lieu-thong-ke/2021/12/bao-cao-tinh-hinh-kinh-texa-hoi-quy-iv-va-nam-2021/ Information System https://musically.com/2022/02/03/spotify-apple-how-many-users-big-music-streamingservices/ • III Company’s Marketing Mix • Product https://support.spotify.com/us/article/what-is-spotify/ - 20 easy-to-miss Spotify features to take your listening to the next level (n.d.) Insider Retrieved March 19, 2022,from https://www.businessinsider.com/best-spotify-tipsfeatures-hacks#:~:text=One%20of%20the%20biggest%20advantages,want%20to%20use %20mobile%20data Price https://www.spotify.com/vn-en/premium/ • Place & Promotion - Elaborate Marketing Strategy of Spotify (n.d.) IIDE Retrieved March 19, 2022, from https://iide.co/case-studies/marketing-strategy-of-spotify/#:~:text=Marketing%20mixes %20are%20analyzed%20with,Price%2C%20Place%2C%20and%20promotion • - Giải mã chiến lược Marketing Spotify (n.d.) Https://Phuongnamdigital.Com Retrieved March 19, 2022, from https://phuongnamdigital.com/vi/tin-tuc/giai-ma-chienluoc-marketing-cua-spotify.html#:~:text=Ch%E1%BA%B3ng%20h%E1%BA%A1n %20nh%C6%B0%20%E1%BB%9F%20Vi%E1%BB%87t,mi%E1%BB%85n%20ph %C3%AD%20hay%20c%C3%B3%20ph%C3%AD - Spotify Encourages Everyone To ‘Take A Beat’ on World Mental Health Day and Every Day (n.d.) Spotify Retrieved March 19, 2022, from https://newsroom.spotify.com/202110-07/spotify-encourages-everyone-to-take-a-beat-on-world-mental-health-day-andeveryday/ III Marketing Strategic objectives and orientations • Marketing Objectives https://somespotify.wordpress.com/2018/03/08/spotify-target-audience-millenials/ https://newsroom.spotify.com/company-info/ • Marketing Orientations Spotify’s Business Model, Generic Strategy & Growth Strategies - Rancord Society ... self-reliance, openness, diversification and multilateralization of international relations , actively international integration * Opportuinity: Vietnam with the trend of constantly expanding and developing,... RECOMMENDATION E REFERENCES LIST I Brief Introduction https://en.wikipedia.org/wiki /Spotify II Business? ??s environment analysis Technological Environment https://appota.com/report • • Economic Environment... successful connections with target customers Companies, like Kellogg, must constantly monitor and adapt to changing conditions—or, in many cases, lead those changes Marketers, more than any other group