Robinson Amy Spotify Brand Equity PDF

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MKTG2508 Assignment 1 - Brand Equity...

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08BRAND EQUITY PROJECT

Table of Contents Task 1.........................................................................................................................................1 Task 1.1: Brand Overview..............................................................................................................1 Task 1.2: Research Approach.........................................................................................................2 Task 1.3 Analysis and Findings......................................................................................................3

Task 2:.......................................................................................................................................6 Task 3:.......................................................................................................................................8 Appendix....................................................................................................................................9 1.0 Spotify Free vs Premium...........................................................................................................9 1.1 Spotify Premium Packages.......................................................................................................9 Appendix 2.0:.................................................................................................................................10 Appendix 2.1:.................................................................................................................................10 Appendix 3.0:.................................................................................................................................14 Appendix 3.1:.................................................................................................................................16

Bibliography............................................................................................................................20

Task 1 Task 1.1: Brand Overview With over 320 million active monthly users, Spotify is a free (or premium) digital music streaming service that gives the user access to a vast array of music, videos, news and podcasts [ CITATION Von19 \l 3081 ]. Spotify has over 50 million songs in its library, 1 million podcasts and streaming service adds close to 40,000 new songs a day [ CITATION Wil20 \l 3081 ]. Spotify possesses approximately 94 million more subscribers (144 M) than its closest competitor Apple music (50 M), thus demonstrating its dominance in the streaming industry and why it is known as, “the biggest streaming platform in the world,” [ CITATION

Sav20 \l 3081 ]. Valued at over 13 Billion dollars, Spotify has numerous packages (see Appendix 1) that allows users to tailor the streaming they want to their personal needs and desires [ CITATION Biz20 \l 3081 ]. Significant quantitative and qualitative data such as the Swedish company’s financial data, are distinct reasons as to why customers value Spotify’s equity.

Customer-Based Brand Equity: Customer-Based Brand Equity or CBBE is utilised to demonstrate how a brand’s achievements and success is directly credited to the consumer’s outlook towards that brand. For example, if a company isn’t successful in its industry and do not have a successful reputation and relationship with consumers, customers are less inclined to support them as a brand. Spotify is a classic example of a brand with positive brand equity. It provides consistent customer experience, they are reliant, innovative and purposeful, and are perceived to be pertinent in people’s day-to-day lives, therefore, making them indispensable.

Task 1.2: Research Approach The research approach chosen for this report is the collection of both quantitative and qualitative data through interviews and an anonymous survey via Qualtrics. Both the interviews and surveys (see appendix 2.0 and 3.0) use questions detailing user demographics as well as questions relating to the customer-based brand equity dimensions. 5 interviews were undertaken from close friends and families and this information was used to form the surveys sent out. The CBBE dimensions included in these interviews and surveys are made

up of elements such as Brand Salience, Brand Meaning, Brand Resonance and Brand Responses.

Task 1.3 Analysis and Findings In order to analyse and comprehend the obtained quantitative and qualitative data the CBBE Keller Pyramid Model was applied to the data [ CITATION Clo \l 3081 ]. The four predominant subcategories of the pyramid are; Brand Identity, Brand Meaning which incorporates performance and imagery, Brand Response which incorporates judgements and feelings, and Brand Resonance [ CITATION Kel93 \l 3081 ]. To investigate and interpret Spotify’s brand equity, questions for the survey were developed based on these four categories (see Appendix 3.0). The results were obtained, analysed and are summarised below.

Brand Identity: Brand Identity focuses on creating brand awareness. This CBBE category focuses on how well the brand stands out, meaning how well the brand identities serve their functions [ CITATION Qua20 \l 3081 ]. By analysing the answers to the survey, it’s clear to see that users' responses to Spotify's brand identity were extremely positive. Question 1 asked, “when you think of music streaming platforms what comes to mind?” All four responses to the question had Spotify in them with 80% of responses listing Spotify first. This clearly distinguishes Spotify's broad customer base and its dominance in the streaming industry. Furthermore, in August 2019, Spotify paired with Samsung becoming it’s go-to music provider [ CITATION For19 \l 3081 ]. This further promoted the app as Spotify was preinstalled with every Samsung phone. Ultimately, it’s clear to see Spotify's positive brand identity.

Brand Meaning: Brand meaning follows after brand identity and focuses on informing the customers more about the product [ CITATION Kel93 \l 3081 ]. Factors such as its value for money, logo, durability, functionality, and customer service are all analysed in this section. Questions for the survey were tailored to ask the interviewee about the characteristics of Spotify, what they think about the brand and how it competes with its competitors. Appendix 3.1 clearly depicts that potify is yet again very dominant and positive in this section. Responses to the survey and articles depict that Spotify executes its brand meaning by reliably streaming endless quantities of music at the highest sound quality available [ CITATION Goo19 \l 3081 ]. Interviewee number 4, in question 5, supports this by saying, “Feels like my listening options are endless, the music quality is infinitely better than the other streaming services I use,” (see Appendix 2.1). Furthermore, Spotify’s brand image curates unique, and intriguing imagery. Spotify achieves this by using a simplistic, bold, minimalist, modern logo with a bright, flashy and bold colour scheme [ CITATION Goo19 \l 3081 ]. Interviewee number 3 in question 2 said, “the logo symbolises connection, the colour green is quite peaceful too,” (See Appendix 2.1). Ultimately, it’s clear to see that Spotify efficiently delivers brand meaning.

However, this section of the CBBE pyramid is Spotify’s worst. It’s only downside, as mentioned by an interviewee, is that users cannot access the quantity of remixes and unearthed/unlabelled songs as SoundCloud has. This will be discussed further in section 3.

Brand Response: Brand Response focuses on how the customers feel and judge the brand. In the survey, interviewees were asked about how they felt towards the brand, and were questioned on the

brands credibility, quality and customer service. Interviewees always responded positively with the app with an interviewee explaining they love the app (see appendix 2.1). Furthermore, Spotify uniquely tailors its responses to customer requests and enquiries, evincing consumer feelings of eagerness, trust, and passion for the brand [ CITATION Clo \l 3081 ].

Brand Resonance: The apex and most difficult stage of the CBBE pyramid model is Brand Resonance. Brand resonance focuses on the relationship between the customer and the brand [ CITATION Kel93 \l 3081 ]. More specifically speaking, it focuses on loyalty, passion and whether the customer will be an advocate for the brand. Interviewees reported how the brand possess a strong sense of community, and all depicted that they would 100% recommend Spotify (see appendix 2.1). The number of active monthly users has risen 66% in the last two years and continues to rise [ CITATION The201 \l 3081 ]. Ultimately, it’s clear to see that Spotify has successfully created a strong relationship between itself and its consumers.

Task 2: Upon analysis of the four CBBE pyramid categories, it's clear to see that each category uniquely contributes in different degrees to Spotify's brand equity. The categories of the CBBE pyramid can be classified as high, medium, and low. Ultimately, showing the direct impact of each dimension.

Brand Identity: Through reflecting on the obtained primary and secondary data, it’s clear that the Brand Identity of Spotify can be categorised as high. All four responses to the question had Spotify

in them with 80% of responses listing Spotify first. This clearly distinguishes Spotify's broad customer base and its dominance in the streaming industry.

Brand Meaning: Despite the obtained primary and secondary data suggesting that Spotify's Brand Meaning should be categorised as high, this particular section of the CBBE pyramid in relation to Spotify is categorised as medium. Spotify sufficiently delivers its brand meaning by reliably streaming endless quantities of music at the highest sound quality available. An interviewee supports this by saying, “Feels like my listening options are endless, the music quality is infinitely better than the other streaming services I use,” (See Appendix 2.1). However, as mentioned by one interviewee, there is room for improvement regarding the size of its music library. It’s main competitors Soundcloud and Apple Music possess music libraries which are much larger than Spotify’s. If Spotify was to address this, their brand equity would increase (see Task 3).’

Brand Response: The obtained primary and secondary data that refers to how customers feel towards the brand, was all positive connotations with one interviewee depicting that they, “love it,” (See Appendix 2.1). Therefore, it’s clear to categories Spotify's Brand Response as high.

Brand Resonance: Interviewees reported how the brand possess a strong sense of community, and all depicted that they would, “100% recommend Spotify,” (See Appendix 2.1) Ultimately, it’s clear to see that Spotify has successfully created a strong relationship between itself and its consumers.

Therefore, it is appropriate to suggest that Spotify's Brand Resonance would be categorised as high as well.

Task 3: As mentioned in section 1.3, Spotify does have one weakness on the CBBE pyramid of which will now be analysed further. Soundcloud is one of Spotify's biggest competitors which has a music library which is 2 and a half times the size of Spotify’s. With a total of 125 million songs in its library, Soundcloud prides itself on being the platform for unearthed new talent and DJs to release their mixtapes and to become discovered [ CITATION Mon19 \l 3081 ]. This is predominantly due to its

ease of uploading and low policing of copyright laws. Approximately 110 million of the 125 million songs are free, user loaded tracks [ CITATION Mon19 \l 3081 ]. Furthermore, Apple Music has a music library of 60 million which is 10 million larger than Spotify’s. If Spotify was to add more unearthed/user-uploaded songs to its library, it would increase the brands equity, thus creating a larger customer base as more SoundCloud users would convert to Spotify [ CITATION Dav15 \l 3081 ]. However, a large majority of these user-uploaded songs have extremely poor quality [ CITATION Kas16 \l 3081 ]. This would in turn damage Spotify's Brand Resonance and Brand Meaning as Spotify prides itself on having the highest quality music. An interviewee even commented on this saying, “it has the best quality music compared to any other app I’ve used,” (See Appendix 2.1). Ultimately, if Spotify was able to address this issue and develop a system where user-uploaded songs were more prominent and still maintained the high quality it prides itself on, the brand equity would increase.

Despite this CBBE weakness, Spotify still continues to perfect numerous aspects of the CBBE pyramid. It’s Brand Identity, and Brand Response are two particular areas within the pyramid of which the brand masters. It’s clear to see throughout this report how customers are kept engaged, excited, and extremely intrigued by the Brand as they feel the brand actually cares for them. Ultimately, this increases Brand Resonances as customers become brand ambassadors and advocate for the brand, thus increasing the brand equity.

Appendix 1.0 Spotify Free vs Premium Spotify Free Access to all songs Podcast and Audiobook access Use Spotify when travelling abroad Pick and play any track on mobile No ad interruptions Listen without internet

✓ ✓

Spotify Premium ✓ ✓

For up to 14 days

✓

Available on select playlists

✓ ✓ ✓

connection Highest music quality

✓

1.1 Spotify Premium Packages Premium Individual Package 1 month free Premium Duo Package

1 month free Family Package

1 month free Student Package Deal

Deal Inclusions  1 Account  Listen to music ad-free  Play anywhere- even offline  On-demand playback  2 Accounts  2 premium accounts for a couple under one roof  Duo Mix: A playlist for two, regularly updated with music you both enjoy  Ad-free music listening, play offline, ondemand playback  6 premium accounts for family members living under one roof  Family Mix: A playlist for your family, regularly updated with music you all enjoy  Spotify Kids: A separate app made just for kids  Block explicit music  Ad-free music listening, play offline, ondemand playback  1 Account  Special discount for eligible students in University  Listen to music ad-free  Play anywhere-even offline  On-demand playback

1 month free [ CITATION Spo20 \l 3081 ]

Appendix 2.0: Interview questions for Spotify: 1. When you think of music streaming apps, what comes to mind? 2. When you look at Spotify’s logo, what comes to your mind?

Price $11.99/Month

$15.99/Month

$18.99/Month

$5.99/Month

3. What is your opinion of this brand? 4. What are your thoughts on the Spotify slogan, “Music for every mood”? 5. How well do you think Spotify provides functions for music streaming compared to other services? 6. Do you think any of these services are particularly unique to Spotify? 7. Are you satisfied with the pricing of Spotify premium compared to other apps? 8. Do you respect Spotify as an authentic app that you trust and rely on? 9. When and where do you use Spotify? 10. Have you seen any advertisements from Spotify? 11. To what extent does Spotify fully satisfy your wants and needs? 12. Are there any functions of Spotify you find particularly innovative and unique? 13. How likely would you be to recommend this brand to others? 14. What feelings do you feel when you think of Spotify? Fun? Creative? Somber? 15. Does this brand give you a feeling of social approval?

Appendix 2.1: Interview Responses 1. -

When you think of music streaming apps, what comes to mind? Spotify, I’ve been with them my whole life and always loved the app. Soundcloud and Spotify Spotify, SoundCloud and Apple Music Spotify, Apple Music

2. When you look at Spotify’s logo, what comes to your mind? - Sound waves and laying on the grass listening to music, just relaxing - Looks to me like the Wi-Fi logo, which could symbolise connection. The green colour is quite peaceful too. - The logo symbolises connection, the colour green is quite peaceful too,” - Connection, music, simplicity too because the logo is so basic

3. What is your opinion of this brand? - Absolutely love it, wouldn’t know what else I’d use. - Fantastic app, so easy to use, whenever I’m bored, I just jump on Spotify and go through my discover weekly or release radar and listen or find new music - Wouldn’t use any other streaming platform, been with them since high school and never been more satisfied. - Easy to use, endless music streaming.

4. What are your thoughts on the Spotify slogan, “Music for every mood”? - Suits it perfectly, I listen to music on Spotify at the gym, when I'm eating dinner, partying, driving to work or sad

-

I didn’t know that was its slogan but 100% describes the service for what it is. Super catchy, makes me think of some super fond memories of mine I love it. There’s so many playlists and songs on the app perfect for every occasion. Whether I’m at work, the gym, sad, or getting ready to go surfing, I always have a Spotify app open.

5. How well do you think Spotify provides functions for music streaming compared to other services? - I tried apple music for a bit when I got my new iPhone last year and I just hated it. It was so confusing, and I often listen to my discovery weekly when I’m at home relaxing and it didn’t have that option, so I scrapped that after a week and went back to Spotify. - Spotify just dominates the other apps. It is so much better. Only thing I don’t like about - Spotify is that it doesn’t have a lot of remixes and unearthed talent like Soundcloud does. - Feels like my listening options are endless, the music quality is infinitely better than the other streaming services I use 6. Do you think any of these services are particularly unique to Spotify? - Yes, the discover weekly and the release radar are definitely unique - I’m not sure whether it is unique to Spotify, but they were the first ones to do it right and do it well. - Yep, the way they tailor music suggestions and playlists to you is completely unique I reckon. - Yep, Spotify are the only ones to do the discover weekly aren’t they.

7. Are you satisfied with the pricing of Spotify premium compared to other apps? - I pay $6 a month I think on a student program and that works perfectly. The apple music is like $25 or something ridiculous I think so 100% I am satisfied - Yep, I reckon it is worth the money and more - I’m on a family plan and it covers my entire family for a really good price. Definitely worth the money, I think its super reasonable - Yes absolutely, I think it is reasonably placed for what it offers

8. -

Do you respect Spotify as an authentic app that you trust and rely on? Yes, I can’t imagine anything happening that would cause me to lose trust in the app The app seems very safe and secure because it is such a big-name brand Yes, it does not feel dodgy at all, it feels very professional Yes, I do

9. When and where do you use Spotify? - On my way to work in the morning and afternoons on the bus - Anywhere really, while I study, while I shower even if I am just hanging around the house, I always have music on - Mostly when I am at the gym and in the shower, I can never shower without music and Spotify is what I use - All the time, I rarely don’t have music playing. I have different playlists made for my different moods and different activities I may be doing (studying, gym, showering, etc)

10. Have you seen any advertisements from Spotify? - No not that I can think of - Yes, I think I have seen a billboard for it a few times, I also see ‘Powered by Spotify’ type ads here and there - I see TV advertisements and YouTube ads - When a new album comes out from a popular artist, I see ads to listen ...