As a new product, XM has the potential to offer a variety of value propositions to different
Instructions: Answer all of the questions below. All questions relate to the XM Satellite Radio case. Each sub-part is worth 10 points. Questions: 1. As a new product, XM has the potential to offer a variety of value propositions to different segments. a) What are all the relevant consumer segments for XM? b) Describe each of these different consumer segments and the value proposition of XM to these segments? c) Who do you think should be the primary target market for XM? 2. Now let’s think of pricing. a) What are the key aspects that XM needs to consider in creating its pricing scheme? b) How should the price of the service and hardware change over time? High-tech new products (e.g., Flat-panel TVs) often follow the “price-skimming” approach (i.e., starting off with high prices and then lowering them over time). Would you, or would you not, recommend a “price-skimming” approach for XM’s service and hardware prices? Give reasons either way. 3. This part is about how XM can earn revenue. a) What revenue model should Robert Acker recommend that XM pursue to capture value from satellite radio (e.g., how should they be thinking of advertising revenue versus subscription revenue)?