Rationale of New Product Selection: Xfm Corporation - Essay Example

Xfm Rationale of New Product Selection: The strategy required in the choice of a new product for a company already involved in business activity has to be such that it addresses the changes seen in the existing market segments needs or addresses new segments of market that the company wishes to tap. In addition, the icing on the cake would be to select a new product that provides support for the existing line of product or products and enhance its appeal to the existing market segments or increase the visibility of the existing line of products. The existing products could be at different stages of their life cycle and the introduction of new products in a changing market environment is to, in the minimum, keep up with competition and better still keep ahead of the competitors. (Traynor, Ian. Product Life Cycles - developing your product strategy). Business History of British Broadcasting Corporation: To assess the utility of this strategy a look at competitive activities would prove useful. In the case of Xfm, the history of business activity of British Broadcasting Corporation would be a pointer in the right direction. The radio broadcast service activity of British Broadcasting Corporation runs back for many a decade to 1922. The radio broadcast service was most known for its news service and in the British colonies was looked upon as the most reliable radio service offering current news around the world. From this position in the analogue radio product market, BBC Radio has expanded to provide digital radio broadcast service also and its ten radio stations providing a complete range of radio broadcast services and thus becoming the leader in the radio broadcast market. Enhancements in the product range offered by BBC Radio were in keeping with the changing market needs and thus kept ahead of competition. British Broadcasting Service were not complacent in just keeping with the changes in the radio broadcast market and on realizing that the television media was growing at the expense of the radio broadcast market, because of the added benefit of video coverage, made the bold decision of introducing products to meet the growing television services market and the brand image of British Broadcasting Corporation was able to pose a challenge for its competitors especially in its core business activity of news and current affairs television programs. (bbc). New Product Options for Xfm: On the basis of the information of the business activity of British Broadcasting Corporation, the choices of products available to Xfm is to increase its product range in the radio service market and attach segments of market that it has not tapped so far. Xfm has identified a new potential market segment in the form of the market of the middle aged that uses radio broadcast services as a part of their entertainment. This means that Xfm could start a pop music broadcast program, with the content moving back in time to pop music relevant to their younger days, taking advantage of the nostalgia of the middle aged market on hearing those music strains. The second option for Xfm is to follow the path of success shown by British Broadcasting Corporation by creating a television program to address the larger market segment of people that use the television as the medium for their entertainment. The new product could be such that it addresses the existing market segment of rock and indie music, which Xfm has successfully tapped and tailored to address the newly identified market segment of middle aged people by providing popular music of their younger day’s era as an enhancement in the product. The third option is to introduce a product in the extended music services that it already offers in the form of hardware for listening to its music broadcasts, latest news in the popular music world and music and movie CDs and DVDs. Such a product could be a hardware device or a range of hardware devices to listen and or watch the music CDs or VCDs or DVDs marketed by it. Analysis of Options: Having looked at three possible options available to Xfm in the creation of a new product it becomes necessary to analyze the three options and come to a conclusion as to which of these three options offers the best solution as a business proposition. The first option of starting a music program to address the market segment of middle aged people offers a rather narrow window of opportunity and needs to be considered only when more wider opportunities have been exhausted or the possibility of business profitability is a definite assurance in terms of the time, effort and resources that would go into it such that it dwarfs the other business opportunities. The third option of expanding the music services offered in terms of offering hardware devices for listening to CDs, VCDs and DVDs is essentially a sales channel activity and is fraught with the problems that are a part of a sales channel activity, due to the dependence on the manufacturer and low margin of returns. The only manner in which these difficulties can be mitigated is by assuring a larger volume of turnover and this is something Xfm cannot be sure of. The second option to start a television program that provides television entertainment to the existing target segment of rock and indie music, as well as addressing the middle aged people segment of the entertainment market offers the best possibilities. Benefits of the Television Program Product Option: This option makes use of the existing brand image within the music segment of rock and indie music lovers that Xfm has so successfully tapped. It provides this segment with a second and maybe even better option, since the television medium is more popular, as it gives both audio and video entertainment. Xfm can also widen its target base into the segment it would like to become popular in and that is the middle-aged segment of music lovers. History is also on the side of this option, with the experience of BBC in successfully expanding its core activity from audio radio broadcasts to audio-visual TV programs. The next point is to analyze whether this option would strengthen the existing core activity. There is a large segment of music lovers that mostly use the television as the means of listening to music and this segment would not be really aware of the Xfm radio programs. Viewing the TV program of Xfm with the added video value would draw this segment into listening to music from Xfm on the radio, when out of reach of a television. In addition the brand image of Xfm is expanded into the market segments that were not addressed by Xfm before and this should assist the original business activity of radio programs and other related music services. There remains one problem however and that is making the product available, as setting up a TV station is cost prohibitive in terms of this single product expansion. Making the Television Program Available: This problem can be resolved by using either of two options. The first is to make the new television program available through any of the three popular Television stations of BBC, ITV and Sky. The choice here is ITV as BBC is a competitor in the radio field and is not likely to encourage this expansion of Xfm. Music content in Sky programs are limited and ITV offers the best option here and may utilize this opportunity to provide for more options on its music programs. There is yet another option and this is the most suited option. Google is all set to air television programs via the Internet and is already in touch with BBC for its television programs. Google is not a producer of television programs and would only be too glad to provide a music program on the Internet to increase the value of its service. This window of opportunity is wide as the competitors of Google in terms of Yahoo! and Microsoft are believed to be in the process of getting set to provide similar services. The choice of this option to make the new television program provides Xfm another benefit in that it can expand its horizon from just within the shores of the United Kingdom to all around the world to both static and mobile users of the Internet and keep up with competition or keep ahead of competition. (Prigg, Mark. Watch shows through Google TV). Works Cited bbc. Retrieved November 16, 2005. From, ketupa.net media profiles. Web site: http://www.ketupa.net/bbc.htm. Prigg, Mark. (2005). Watch shows through Google TV. Retrieved November 16, 2005. From, Evening Standard. thisismoney.co.uk. Web site: http://www.thisismoney.co.uk/news/article.html?in_article_id=403998&in_page_id=2&ct=5. Traynor, Ian. Product Life Cycles - developing your product strategy. Retrieved November 16, 2005. From, marketing magic. Web site: http://www.marketing-magic.biz/archives/archive-management/product-life-cycles.htm. Read More