Why are marketing strategies important? Companies use marketing strategies to increase their profitability by growing their market share. A higher market share can create a strong advantage for an organization. If a company releases a product or service for which there is a demand, then that means more people will purchase it (generating more revenue), it will be easier to advertise (reducing ad spending), and it will be more difficult for competitors to compete against (solidifying the organization’s position in the marketplace). Companies rely on effective strategies to increase market share, such as innovating with their products, developing and maintaining good relationships with their customers, and outperforming their competitors. In this Discussion, you will consider how a specific company could benefit from increasing its market share, as well as provide recommendations for how to do so.
Select a company you are familiar with or one that is well-known that you feel could benefit from increasing its market share.
Post an evaluation of marketing strategies for capturing market share for a company, to include the following:
Provide a brief description of the company you selected.
Explain how you think the company could benefit from increasing its market share.
Justify at least three recommendations that the company could incorporate to increase its market share.
Solidifying Network Effects: For a platform, more users (especially creators and podcasters) attract even more users, creating a powerful network effect. A higher market share solidifies Spotify as the de facto industry standard for discovery and consumption, making it harder for competitors to lure away users or content creators. This establishes a "moat" around the business.
Data Advantage and Personalization: Every new user provides valuable data. A larger market share means a larger, more diverse dataset, enabling Spotify's AI algorithms to offer superior personalization (e.g., Discover Weekly, personalized radio). This better user experience becomes a self-reinforcing competitive advantage that is difficult for rivals with smaller user bases to replicate.
Recommendations to Increase Market Share
Spotify could incorporate the following three marketing strategy recommendations to increase its market share:
| Recommendation | Strategy Focus | Justification |
| 1. Regional Pricing and Hyper-Local Content | Market Penetration/Product Development | In high-growth, price-sensitive markets (e.g., Southeast Asia, Africa, parts of Latin America), the premium price is often prohibitive. Spotify should increase its market share by implementing geo-specific, tiered pricing models that align with local purchasing power. Furthermore, investing in exclusive local podcasts and music deals makes the product more indispensable to regional consumers who may feel underserved by global catalogs. |
| 2. Bundling Partnerships with Non-Competitors | Market Development/Strategic Alliance | To capture users who may be indifferent to music streaming platforms, Spotify should aggressively pursue strategic bundling with non-competitive, high-usage services. Examples include: a free/discounted subscription bundled with a major telecom plan (similar to a Netflix/Verizon deal), a college tuition package, or a popular gaming service. This strategy lowers the acquisition cost and friction for new users, rapidly increasing market penetration. |
| 3. Enhanced Creator Economy Tools and Monetization | Product Innovation/Value Proposition | The biggest threat is content creators moving to platforms that offer better revenue splits (e.g., Substack for podcasters, YouTube for artists). Spotify must increase its market share by making its platform the most lucrative for artists. This involves: improving direct fan-monetization tools (e.g., ticket sales, merch integration), offering better podcast subscription revenue splits, and implementing features like integrated NFT/tokenized content to reward and lock in creators. The content follows the most attractive monetization platform, driving users and market share. |
Sample Answer
Marketing strategies are vital because they provide the roadmap for achieving business objectives, specifically profitability and sustainable growth through increasing market share. A larger market share translates directly into economies of scale, stronger competitive barriers, and greater pricing power.
Evaluation of Marketing Strategies for Capturing Market Share
I've selected Spotify, the global audio streaming service, for this analysis.
Company Description
Spotify Technology S.A. is a Swedish audio streaming and media services provider. It operates globally, offering digital rights management-protected music and podcasts, including millions of songs and originals, primarily through its ad-supported free tier and its premium subscription tier. While it dominates the global market, it faces intense competition from companies like Apple Music, Amazon Music, and YouTube Music.
Benefits of Increasing Market Share for Spotify 📈
Spotify would benefit significantly from increasing its market share, particularly in the premium subscriber segment:
Increased Pricing Power and Profitability: Although Spotify leads in total users, its profitability margins are notoriously thin due to high royalty payments. By increasing its premium subscriber market share, Spotify gains greater leverage in negotiations with record labels and content creators. This could lead to lower per-stream royalty rates, directly boosting its long-term profit margins.