Integrated Marketing Communications Major
Student, Creative and a Bboy
So recently I spoke about a clothing email site that sends offers daily via email to subscribers. The site is PLNDR.com. It is a clothing outlet site that buys overstock items and sells them at high discounts. They have categories for each brand that they have in stock which changes daily. To start they use the classic tactic of making you wait and “apply” to be a member. Once you wait the few days to become a member you have full access to their inventory. They have both men’s and women’s streetwear clothing offerings at large discount. They also offer occasional additional sales and discounts for referring new members. The site has a sleek clean layout making it easy to navigate and easily targeting each marketed segment. They practice this method within their email marketing as well.
PLNDR has a very specifically targeted listserve. They only include those who have actively tried and succeeded to become members of the site’s offerings. Further, their email targets either men or woman, not both eliminating unneeded content. This makes the content immediately more applicable to the already well targeted listserve. The layout of these emails also makes it very easy to read and engage.
The email themselves are very similar to the site. This helps the company to establish a common theme to further develop brand identity. Both are based on a grid layout system making it easy to read. It also makes it easy for the consumer to scan the email for content applicable to them.
This brand uses another tactic in their emails that helps to further develop their customer relations. Already being extremely targeted within the email content, the consumer already has a great perception of the brand. But PLNDR continues to portray a non-threatening atmosphere within their emails using their opt-out email option. At the email they have their opt-out link as an additional box within their grid system instead of size 6pt font at the very end of the email extending it eight lines below content. This makes the subscriber feel less threatened by common marketing tactics.
PLNDR is one of many sites under the same parent company that employ these tactics. Another similar one is jackthreads.com. They use the grid layout design in their website and emails to portray a similar brand identity.
In a Nutshell Pandora is an online radio service that allows its users to customize the content that they want to hear. Pandora was launched in January, 2000. The base service is free and enables consumers to select a particular genre, artist or even a particular song to then sample the rest of what they want to listen to. Further, the user can ‘thumbs up’ or ‘thumbs down’ any particular song in order to further develop the sound of their radio station.
The service has only been available since the development of the Music Genome Project. First conceived by “musicians and music-loging technologists” Will Glaser and Tim Westergren in late 1999, the final product consists of a mathematical algorithm to “capture the essence of music at the fundamental level”. The equation uses almost 400 attributes to develop the users personalized radio station. Some of those categories include “Structures/Composition” (i.e. compelling intensity, interesting song structure, etc.), “Roots” (i.e. Folk, Funk, Hard Rock, etc.) among many other categories of attributes. The Music Genome Project is constantly updated and And sadly for the rest of us…. the algorithm is patented.
User’s can even test out Pandora’s service for a short interval without subscribing to it (approximately one hour). After that time Pandora will ask the user if they want to sign up by filling out only a few fields. But for those addicts, there is a 40 hour listening duration per week (I sadly hit that limit when I was traveling back and forth across the country).
Pricing Strategies under Anderson’s Taxonomy
Freemium: Pandora is a free web service where most all users not paying customers (98.3%). Their paid subscribers, the service referred to as Pandora One, pay $36 a year for no ads, higher quality music and unlimited play time. For those 1.7% of users Pandora makes only 13% of its overall revenue. That means at least 87% of its total revenue is from advertising.
Advertising: Pandora has free content that is subscribed to by advertisers that post various ads. Pandora employs dozens of ads to each users experience. They manage to do it tastefully though by only interrupting the actual audio approximately once every ten songs with only a 30 or 60 second spot. Free users might be deterred slightly but it has yet to reach the vast quantity of ads that traditional FM radio throws at its listeners.
Types of Ads Pandora Utilizes:
Evaluation of Pricing Strategies
So what does this cost Pandora to bring you this incredible service? Basically nothing. Courtesy of thepricingjournal.com the attached diagram shows Pandora’s IPO filed in February of 2011. It costs Pandora three tenths of a cent to provide each hour of music.
Pandora pulled in $138 Million in revenue during the 2011 fiscal year and is continually increasing. A lot of their listening has been attributed to their mobile apps for android, iphone, ipad, and others. Pandora is constantly increasing their competitive advantage by expanding their services. They have recently offered new types of channels including comedy and their most recent political channel.
For this case study I wanted to take a different approach. I stumbled across a new technology that related to something Professor Komaromi discussed in class and wanted to report on it. The technology barrier in the United States is slightly larger than other countries at the moment. Whether this is due to security concerns or another element, it is unknown. But, Isis Mobile Wallet coming out this summer will be the driving force that bridges the technology gap between Asia and North America. Releasing this coming summer, Isis will enable users to use their Chase, CapitalOne, and Barclaycard bank cards. In addition it will be a massive force in processing additional payments even faster with many additional features.
Isis will allow AT&T, T-Mobile and Verizon service users to process payments at locations that offer the technology with the touch of a finger. They can load their Chase, CapitalOne and Barclaycards into their Isis Mobile Wallet App in order to shop at various retail locations. The other various features of this app are incredibly extensive. This app will also offer various features such as loyalty programs and coupons giving it an additional edge over previously used payment methods. Bank users will be able to check their statements and make transfers all from the comfort of one app and not multiple different banking apps. You will also even be able to activate a new card through this app!
The marketing for this new retail strategy will need to be very minimal. The target market consisting of current card holders is already driving itself. Customers are continually looking for ways to make life easier and less stressful. Not having to carry a wallet just makes it that much easier. It will drive more transactions for card companies, for usage/possible interest for banks, more business for retailers, more phone usage for service providers and cell phone manufacturers. This product is mobile marketing strategy in itself. Personally I cannot wait to get back to Los Angeles via my free Capitalone miles that I will rack up.
But back to security… What makes all this okay? Well with no additional information other than what is on their website, Isis claims it is “Safer than your existing wallet.” The security features features it offers are as follows:
This project has been the result of a large commitment from Isis to maintain longstanding relationships with service providers (AT&T, Verizon, and T-Mobile), card companies (Visa, Mastercard, and Discover), banks (CapitalOne, Chase, and Barclaycard), cellphone manufacturers (HTC, LG, Motorola Mobility, RIM, Samsung Mobile and Sony Ericsson) and upcoming retailers. This will be a massive feat for Isis. But in the longrun this will generate lots of business for all parties involved. This will soon drive marketing strategies throughout the retail industry. The project plans to start in Salt Lake City, UT and Austin, TX this summer.
Chances are by now you’ve heard of someone “stumbling” to kill some extra time. Although it was founded in 2001, StumbleUpon has hit the college age demographic hard over the past three years. Often I walk through the library and see people stumbling to procrastinate, or in class you see the kid next to you with StumbleUpon’s toolbar in his browser. But for people who use it a good amount and keep it up to date it’s better than just a time-killer or procrastination tool.
Their unique services offer collaborative filtering of your specified interests to search the web for pages that they think you will find very interesting. Users are able to recommend pages for others creating virtual communities of like minds. Consumers have learned to use it for more beneficial purposes-I personally use it to keep creative with my graphic design work. But others use the ‘Explore’ feature to search for terms tagged within an article to research something specific.
So how does a service like this make money? Well StumbleUpon collects advertising dollars by classifying a company’s webpage under one of their “interests,” that the user marks before they start using the service, and then while stumbling they insert the advertiser’s webpage into your search. This A+ method of mass customization is a great strategy to earn money because users usually don’t even realize they’ve been targeted. Stumble tracks the users recommendations, thumbs up, and thumbs down preferences to accurately target users for their advertising services. The consumer has an attracted mindset toward the category that advertising page is placed and Stumble offers “Guaranteed Discovery” along with the possibility of exponential growth if users thumbs up the page. This seems to be a very ethical way to make those needed dollars. While making the service better for the consumer, the company is better targeting their audiences for advertisers!
Although StumbleUpon seems very successful, it seems their profits are not as high as I initially thought. In 2007 StumbleUpon had made $1.5million and then the founders sold the company to Ebay for $75million… yes, Ebay made another dumb decision and bought another company they wouldn’t profit from. After Ebay realized this they decided to sell it back to the founders for $29million. From this time until early 2011 they made an additional 17million. This gives them a net profit of 93.5million over eleven years of business. Recommendations for this service are quite difficult to make because it is so unique but if Stumble were to team up with Google to place their ads on a right-aligned sidebar it might generate some additional revenue.