Pandora Case Analysis

CASE ANALYSIS

Marketing Management

Pandora Radio

Group :

Muhamad Zakky Alif

Ahmad Fahmi Mubarok

M Najih Matlubi

Lecturer :

Dr. Iin Mayasari, MM,MSi,SIP, SPd

MM FEB UGM JAKARTA

Jalan Doktor Saharjo No. 83, Tebet, Daerah Khusus Ibukota Jakarta 12850

CHAPTER 5 : Creating Customer Value, Satisfaction, and Loyalty

Source : “Pandora Radio : Fire Unprofitable Costumer” by Willy Shih and Halle Tecco in Harvard Bussiness School

Part 1 : Case Summary

Westergren’s company, Pandora Radio, was a very popular Internet radio broadcaster. Westergren’s mind flashed back to some of the lean years before a 2004 funding round when the company had stopped paying employees for more than a year. Yet he and Kennedy had managed to keep Pandora going. The company's foray into direct-to-consumer services started off well enough. The year 2009 promised to be challenging. On the operational side, a pivotal part of Pandora's model revolved around managing costs. The company had an ongoing battle with the Copyright Royalty Board, a panel of three judges that set the license fee the Company had to pay every time it streamed a song to a user.

Pandora had grown organically, on the strength of word-of-mouth publicity. While Pandora had evangelist users to thank for explosive growth, these same users were also the most costly. Furthermore, Westergren and Kennedy knew they also had to address the "leaky faucet" problem. Because users were not paying for the service, while this streaming cost users nothing, Pandora was required to pay SoundExchange for each song played. They had to figure out how to get users to be more economical with their music streaming. Meanwhile, the number of users coming to Pandora hadgrown to 1,8 million a day.

Part 2 : Main Issue

“How to Creating Customer Value, Satisfaction, and Loyalty”

Part 3 : Problem Statement

1. How Pandora transforms with direct-to-consumer strategy to creating costumer value?...