Marketing strategy and SWOT analysis of Spotify

Imagine you are returning from work, very tired and exhausted. What can help you rest if not listening to your favorite music? It is not a secret, nor a deniable fact that music and music apps play a massive role in our everyday lives. Music apps are real heroes, as, through them, we can have access to every type of music. While there are lots of music applications, this post is about Spotify, one of the world’s well-respected and popular apps. Founded in Sweden in 2008, today as of 2021 Spotify has 345 million monthly active users. What makes this company so successful? To understand the reasons behind Spotify’s continuous growth, let’s look at the marketing strategies and SWOT analysis of it.

Let’s start with learning about the vision and mission statements of the company.

First, it is essential to note that having a right chosen mission and vision statements are necessary for the development of every company. While the mission statement shows where the company is at the moment and its tactics, the vision statement is more focused on the company’s future goals. 

Mission Statement

Spotify’s 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 these creators.”

So, from this statement, we can learn that Spotify announces its purpose in contributing creative work. This mission statement specifically focuses on two sides: consumers and creators. On the one hand, the company creates a huge platform for creative people, such as singers. On the other hand, this platform gives millions of fans a chance to be amused and inspired by these creators.

Vision Statement

Moving forward, the company’s vision statement says that it is “A cultural platform where professional creators can break free of their medium’s constraints and where everyone can enjoy an immersive artistic experience that enables us to empathize with each other and to feel part of a greater whole.”

By comparing it to its mission statement, one can notice that Spotify’s vision statement is more general. The vision statement clearly shows what some of their values are and what one can get by joining them. We can quickly learn that by joining Spotify, one can feel like a part of something great, and it is how the company accepts itself. In that case, Spotify presents itself as a promoter in this big and competitive industrial world. 

Now, it’s time to have a look at the positioning strategies that Spotify uses.

This post is taken from Spotify’s Instagram page. As a main “hero” of their positioning strategy, Spotify has chosen Lil Peep, a singer with an extraordinary appearance. After reading the caption, one can understand that Lil Peep’s mother, Liza Womack is proud of the fact that millions of users of Spotify have access to one of the best projects of his son, “California Girls.” Liza Womack is also happy that people have a chance to create tracks even via email in this era.

Lil Peep is famous for being an American rapper, singer, and songwriter. His official name is Gustav Elijah Ahr (Gus). The singer’s body and face are full of tattoos, and as it is noticeable, Lil Peep is also fond of piercings and other impressive pieces of jewelry. What is more, this rapper also differs with his hair coloring and original hairstyle.

It is essential to understand that Spotify has chosen Lil Peep because of its archetype standards, and the post is representing the archetype itself.

By considering all the things mentioned earlier, one can learn that this singer is someone who “neglects basic standards,” is “revolutionary,” and “surprising.” Therefore, all of this led us to one conclusion – Spotify belongs to the Outlaw Archetype.

Now, let’s find some facts about this archetype. 

Desire: change, revolution, and even revenge 
Goal: to eliminate what is not working (both for this archetype and the society)
Strategy: split, surprise
Values: always seeks to be the controller, neglects the overall standards, alienated from the community 

Here are the messaging levels of The Outlaw Archetype. 

Level One: to feel unable and useless, annoyed 
Level Two: identifying as a one that is from outside, the values of the society in a way that flies in the face of conventional behaviors and morality
Level Three: treating in disruptive ways
Level Four: being revolutionary

The Outlaw Archetype will ensure a relevant identity for brands if:

• The customers or employees feel very displeased with society or identify with the values that contradict with those of the community as a whole 
• One’s product function is revolutionary
• One’s product helps maintain values that are threatened by prevailing values 

Brand Archetypes. Why do we need them in practice?

Our communication strategy may have multiple messaging approaches. But there is some logic that unifies all these and it is called communication based on the archetypal branding. A company may have many messages, but they do not have something in common. For example “Do everything easily”, “Go ahead and be powerful” or Dig deeper and be experienced”.

These 3 quotes have different goals and bring different subconscious effects. One is about Being a Hero, another is about gaining more experience. These are 2 different directions of messaging and the logics of Brand archetypes bring more uniqueness and clearness here. Just read the book “8 steps to a complete archetypal branding” and you will have more experience in communication based on archetypes.

Moving forwards, let’s look at the SWOT analysis of this audio streaming and media services provider.

Strengths

Strong Brand Reputation: According to statistics (2019), Spotify is a music streaming industry leader and the second highly regarded brand among all brands. 

Availability: Spotify is available not only on smartphones and computers but also through smartwatches, Bluetooth speakers, and many more. 

Easy access: The app is straightforward to use compared to other this kind of application

User-friendly: Based on one’s past listening history, this app can recommend its users songs suitable to their preferences. In this sense, Spotify personalizes music selection and makes this app user-friendly. 

Quality: Spotify has gained popularity due to the quality streaming service that its offers. 

Weaknesses

Internet connection is a must: If you want to listen to a song through Spotify, even if the song has been downloaded by using an Internet connection, to having access to it, the Internet is a requirement. 

According to statistics, the company does not usually pay enough money to the artists: Spotify pays music owners less than its competitors, which can negatively impact its reputation. As a pattern, because of a low payment, Taylor Swift refused to work with Spotify. 

Lack of unique features: Spotify is very similar to all other music apps. One can notice some differences when using the paid version.  

Opportunities

Cooperation with new artists: Collaboration with many artists means that the number of users of Spotify will also grow

Big investments in video streaming: During 2020, the company already started experimenting with video podcasts. Going a bit deeper into this field can provide new revenue for Spotify.

Expanding: Being available in more countries would help this app gain many users.

Threats 

Competitors: Spotify has lots of competitors, and some of them are even considered to be leading in the world. Apple Music, SoundCloud, Google Play Music, YouTube are among the major competitors of this music app. All these competitors can take many users from them. 

Collaboration: Nobody knows when the artists can refuse to cooperate with the company. Every loss of an artist would impact both the profit and reputation of Spotify.

Now let’s move on Spotify’s segmentation strategy.

To have a better understanding of the segment, let’s look at this short commercial.

The company has created a pretty funny and exciting advertisement that makes people learn about Spotify and join them. As we can see, all the people who took part in this commercial were diligently singing the famous song of Sia until the end, and only after that, they were returning to their daily “problems.”

Moving forward, as it is noticeable, Spotify has chosen several different people with various professions and honors for this commercial. As a pattern, one of them was a man with a beard; another guy was working as a deliverer, another participant was a mother of children, etc. However, even though these people are different, they are connected with music, which reaches out to them through Spotify.

So, this advertisement wants to show that the app is created for every type of person.

What is more, throughout the advertisement, the company included a line that says, “For the ride.” Spotify wants to show that the app is very “adoptable” as one can listen to their favorite song at any place.

Finally, these characters’ smiley faces give the audience a message that they are happy with using Spotify.

As you see, all the participants of this commercial are full of life; even when driving a car, they start to sing or dance and try to find happiness in every minute. With all this on our minds, we can guess that the company has chosen Sharers as a target segment.

Moving further, let’s find some interesting facts about this target group.

 Lifestyle and Values

• The people who present this target segment see life as a gift, and that’s why they try to enjoy every single minute of it.
• For them, family and friends mean a lot, so these people like to stay at home or visit friends. Sharers are fond of cooking and eating healthy
• People who belong to this target segment usually take care of how they look and can even go to GYM.
• These people are ambitious and very purposeful. When it comes to success, money is the most crucial measurement of it.

Shopping preferences

• Sharers do like shopping because they are fond of exploring new things (products, brands, etc.)
• These people are mostly very knowledgeable when it comes to brands. Even if they buy only one product, these people try to purchase brands as much as possible.
• If the people of this group find something close to their “heart,” they would buy it without looking at anything.

Other interesting facts:

• People of this target segment are usually media lovers. However, when it comes to using technologies or computers, they feel uncomfortable using them.
• For them, Radio and TV are the most excellent methods of learning exciting news.
• These people are interested in celebrities’ lives, so they try to read every lifestyle magazine. However, when it comes to politics or the economy, sharers rarely follow the news.
• Travelling is not the best option to have a rest for them.
• Sharers are usually book lovers. Books about cooking, gardening, and health are among the books that these people prefer to read.
• Sometimes they enjoy eating fast food, going to discos or cafes. 

16 Personalities (why do you need them in your business?)

After understanding the basics of Sharers behavior you may ask, what kind of brand will be interesting for them? Which hidden and at the same time important things have to be considered? You can find all the answers to these questions in our e-book called “16 Personalities”.  You will also find all the solutions for your marketing problems, which will obviously change your insights about buyer persona.

Of course this is one of the 16 personalities and with this book you will discover all of them. With knowledge of each 16 personalities you will confidently find your ideal buyer persona and change your marketing strategy to achieve new levels. The book also gives you some other hints for selling your product and negotiating with your clients.

All in all, Spotify is a company that is with us for 13 years and has already made lots of positive changes in the music industry. This post was about some key factors that influenced the activities of this company. I hope that you could gain exciting information about this media service and audio streaming company. To see more posts like this, check out our main homepage.