Waleed El Sayed

Sameh Qotb

Ahmed A.Hafeez

Mahmoud Farghaly

Ehab Ahmed Youssef

Marketing MBA 2B

1 Introduction

2 SWOT Analysis

3 Targeting

4 Positioning

Contents

6 Forecasting

7 Conclusion

5 4 PCs

Introduction

XM Satellite Radio, Inc.

By the end of 2003, XM expects to have

more than 1 million signed up with each

subscriber paying $9.99 per month after

purchasing a $300-500 receiver.

XM Satellite Radio, Inc. was founded in 1992, but didn’t hit the

airways until September 25th, 2001 with its first broadcast in San

Diego and Dallas / Ft. Worth.

.

XM runs programming on 100 different channels offering content from

that found in the mainstream to content targeted towards niche

segments like disco, comedy, and blues. .

XM has formed strategic partnerships with General Motors,

Sony, Clear Channel Communications, and Direct TV, trading

equity in exchange for the benefits they are able to provide to

XM Radio’s business model. XM will require 7-8 million

customers to reach breakeven on an operating cash flow basis,

which many forecast XM to achieve in 2005 or 2006.

WS

1. The receiver XM is about 400$ which is expensive.1. For only 56 days, XM has over 30,000 subscribers.2. XM is compatible with all type of existing car radio.3. A 100$ million advertising campaign . Included TV, radio,

magazines, News papers, direct mail, outdoor and online advertising.

4. XM aired 71 music channels more than 30 of them are commercial free. limited Ads. (2-4 min. per hour on some music channels.

5. (7-9 minutes per hour on third party programming channels like CNN.

6. About 35 channel are commercial free.7. Most affordable than SIRIUS. 8. Reaction to XM service is range from very good to

fabulous. (Telephone survey)

9. Retailers are more excited about the market potential for satellite radio than any other mobile electronic products.

10. Fees are less than SIRIUS by 3$/Month.

SWOT

TO

1. 9/11 terrorist attack.2. SIRIUS has 60 music channels commercial free.3. SIRIUS has strong relationships with retail, electronics

and automotives partners.4. Completely original music programming.5. AM and FM are free.6. Satellite radio , cable radio and internet radio have a

large audience.

1. Very potential market.2. Large sectors of customers spend more than 1 hr driving.3. Rapid growth market.

United Sales In Thousand

2.83.4

7.88.6

30

0

5

10

15

20

25

30

35

SACD & DVDAudio (2000)

TIVO (1993)CD Players(1983)

DVD Players(1997)

XM SatelliteRadio (2001)

Distribution of XM subscribers as of January 2002

XM Radio Customer Satisfaction of 100 Early Adopters (Dec.2001)

ExcellentGoodOkPoorVery PoorElement

94%5%1%Overall Rating of XM Service

92%7%1%Rating of Sound Quality

88%9%2%1%Rating of Signal Strength/Coverage

88%11%1%Rating The Price/Value at 9.99$

XM satellite radio launch advertisements (Sept-Nov. 2001)

Very Smooth

GoodOk/Minor

DelaysInconvenientA Big HassleElement

82%2%11%3%2%Rating of the activation process

XM Has Far Fewer

Commercials

XM HasFewer

Commercials

About The Same

XM Has More Commercials

XM Has Many More

CommercialsElement

85%13%2%Radio rating of the installation process

NoComparison/

XM Clearly Better

XM Better

The SameAM/FM Better

AM/FMMuch Better

Element

93%6%1%Rating of XM compared to regular radio

Very Smooth

GoodMinor

ProblemsMany

ProblemsTerrible

ProblemsElement

86%4%8%2%Radio rating of the installation process

Differentiation Strategy

Targeting

The target market segment we will serve is:

• Adults from 18th to 50th.• Truck drivers and RV owners.• Commuters driving more than 90 minutes

per day.• Business traveler who spend much of their

time in the car. Like a real state salesagent.

• Workplace listeners. Includes places needsnon stop music such as outlets andrestaurants.

• Residents of undeserved rural areas.

These target group spend an extraordinaryamount of time listening to radio, especiallyin the car.

Positioning

The ultimate radio experience

4PCs

Jo

Product

Promotion

Place

Price

ProductK E Y F E A T U R E SSatellite

XM receiver

Customer

• XM radio is a brand new way to listen to radio.

• XM radio is a service.

• XM radio includes 100 channels.

o 71 music channels (more than 30 of them are commercial-free).

o 29 are news, sports, talk, children's, and comedy channels.

o The amount of time used for commercial ranged from 2-4 min. / hr formusic channels and 7-9 min/hr for news, talks and sports channels. Theamount used to partially fill the gap in third party programming that wereleft specially for advertising. XM filled the remaining gap with theannouncement of internal programming and news.

• The sound quality and signal strength are very good.

• The installation and activation process are very smooth.

The packages

Basic package

Premium package

XM Radio

Includes all channels except the 30

Ads. Free music channels.

Includes all channels

• The target market will be North America.

• Use local and national retail stores as distributions channels. Chains like Best Buys and Circuit City have a large no. of stores nationwide.

PlaceXM Satellite• Strategic partner for

manufacturing and distribution channels such as:

Partner with manufacturing of aftermarket car radios such as Sony, Pioneer and Alpine.

Partner with OEM companies (original equipment manufacturer) such as Delphi Delco in order to include XM receiver as factory installed in new vehicles.

• 100$ million advertising campaign.

• The campaign included TV, radio, magazines, newspaper, direct mail, outdoor and online advertising.

• The agency TBWA/Chiat/Day created the campaign: X_M radio the power of X. the campaign branded XM as the ultimate radio experience and used a series of artists-BB King, Snopy Dog and David Bowei.

PromotionXM Satellite

• The campaigns have two main goals

To educate the customers, how to use and how XM is differ from regular AM and FM radio.

To differentiate XM from SIRIUS.

LOGO

PriceFuture Of Radio

• Price of the receiver is about 400$.

• Price of subscription for basic package is about 9.99$/m.

• Price of subscription for the premium package is about 12$/m.

LOGO

Fo

recasti

ng

To reach 8 million customers

Forecasting

LOGO

Conclusion

• XM Radio is adding value to customers who spend much time in their cars and customers in rural area that lake from variety of entertainment.

• XM Radio is differentiated from regularly AM and FM radio because it has 30 music channel commercial free and the rest is limited Ads.

• XM Radio is differentiated from SIRIUS because it is more affordable. And lower pricing structure.

LOGO