Abstract
This articles illustrates the Spotify marketing strategy, and explains its’ all key marketing mix components. Strategic marketing students, researchers, educators and industry practitioners may gain in-depth insights into Spotify’s marketing strategy by reading this marketing mix article.
1. Introduction
In the evolving landscape of music streaming industry, Spotify’s marketing strategy emerges as a compelling example of innovation. This article discusses the Spotify marketing strategies in light of 7-P marketing mix framework.
Click here (Spotify SWOT<company overview) to get basic company information.
2. Spotify Marketing Strategy
2.1. Spotify product strategy
2.1.1. Spotify product mix
Spotify offers a range of products, as shown in following figure:
2.1.2. Recent additions
More additions;
• In 2021, Spotify launched Premium mini with weekly and daily options
• In 2022, Spotify launched ‘Spotify car thing’ that allowed users to enjoy the app in car
• Spotify wrapped is an interesting feature (rolled every December), showing the time and duration of listening to an artist whole year
2.1.3. Spotify unique selling proposition
Here are unique selling points that differentiate Spotify brand strategy from competitors:
2.1.4. Who is Spotify’s target audience?
Spotify’s target audience includes young adults and millennials. Here is a brief profile of Spotify target audience:
• Young adults and millennials (18-34 years’ old)
• Urban dwellers
• Music enthusiasts
• Tech savvy users
Spotify target audience is more clearly elaborated in following table:
| Spotify segmentation | Spotify target market | Spotify positioning strategy | |
| Demographic segmentation | Age, gender, area and income | Young adults and millennials, diverse income background, urban dwellers | Positioned as an ultimate audio streaming platform, offering personalized experience that seamlessly integrates into listeners’ daily life Positioning tagline “your soundtrack to life” |
| Behavioural segmentation | Usage frequency | Free and premium users around the world | |
| Psychographic segmentation | Interests | Podcast listeners, tech savvy users, music enthusiasts | |
2.1.5. Key challenges
While Spotify is a phenomenal product, it does face some challenges:
• Spotify ‘Behind the Lyrics’ feature does not work properly, seeking management’s attention.
• Spotify ‘Squad framework’ for product management failed to accelerate innovation within organization.
2.1.6. Key lessons
Spotify success largely hinges on its strategic emphasis upon:
User engagement and personalization though freemium model and data-driven recommendations, fostering both- premium subscribers, and large user base.
2.2. Spotify pricing strategy
2.2.1. Spotify pricing strategy
• Value based pricing
Spotify charges prices by considering the perceived value of its features (like offline downloads, cross-platform sync, custom play list etc.)
• Tiered pricing
Spotify offers pricing tiers for- individuals, students, families, and duo- accommodating users’ diverse music streaming needs.
Spotify offers both- ad-supported (free) and premium pricing model to its customers. It widens the Spotify’s market reach.
• Geographic pricing strategy
Spotify employs geographic pricing strategy. It charges different prices in different countries considering underlying contextual factors (demand pattern, consumers’ income etc.). Here is the list of countries where Spotify charges highest and lowest prices:
Most expensive countries 2023 (individual plan)
Least expensive countries 2023 (individual plan- Spotify mini)
| Pakistan | $0.049/day |
| India | $0.085/day |
| Vietnam | $0.097/day |
Source: How to Spotify.com
2.2.2. Spotify prices 2023 (global)
Sources: Spotikeep.com
2.2.3. Spotify recent pricing changes
Spotify has maintained its premium service prices for stable last 12 years. But in 2023, the company has increased its premium pricing for $10.99/month-reports The Verge. Its standard monthly subscription prices increased by 10% in 50 markets- The Guardian.
2.2.4. Spotify pricing comparison 2023
| Amazon Music Unlimited | Apple Music | Qobuz | Spotify | Tidal | YouTube Music | |
| Monthly fee | Prime members: $9, £9, $12 Non-Prime members: $11, £11, AU$12; Echo-only service: Free, AU$6 | $11, £11, AU$13; Voice $5, £5, AU$6 | Studio: $13, £13, AU$20; Sublime (per year): $180, £180, AU$250 | $11, £10, AU$12 | HiFi: $10, £10, AU$12; HiFi Plus: $20, £20, AU$24 | $14, £12, AU$12 |
| Free option? | Yes, with ads | No | No | Yes, with ads | Yes | Yes, with ads |
| Free trial period | 30 days | 30 days to 3 months | 30 days | 30 days | 3 months | 30 days |
| Music library size | 100 million | Over 100 million | Over 100 million | Over 100 million | Over 100 million | Over 60 million |
| Family plan? | Yes, $17, £17, AU$19 for max 6 | Yes, $15, £15, AU$18 for max 6 | Yes, $22, £22, AU$30 | Yes $17 per month, max 6 | Yes, HiFi: $15, £15, AU$18 HiFi Plus: $20, £20, AU$24 max 6 | Yes, $17, £15, AU$18 per month for max 6 |
| Student discount | Yes | Yes, Price varies by country | No | Yes, $6, £5 with Hulu and Showtime | Student HiFi: $5, Student HiFi plus: $10 (US only) | Yes, $5 |
Sources: CNET
Spotify’s pricing strategy success reflects in its churn rate, which has fallen by over 30% over last four years
2.2.5. Key challenges
Spotify is compelled to increase its prices to cut the losses and manage the rising costs (Spotify SWOT<weaknesses<high cost) – Hollywood Reporter.
2.2.6. Key lessons
Spotify’s pricing strategy success lies in its ability to:
• Integrate flexibility
• Offer wide- ranging subscription options
• Target broad audience
2.3. Spotify place strategy
2.3.1. Spotify distribution strategy
Spotify distribution strategy is based on the digital platforms. The company partners with telecom operators, device manufacturers, and music retailers to reach the global market.
2.3.2. Spotify distribution channels
Spotify distributes its services through multiple channels:
2.3.3. Spotify distribution network
Through a series of successful strategic alliances, Spotify has successfully expanded its global footprint across the world:
Source: Statista
It is currently present in 180 countries, and available in 62 languages. The most recent expansion decisions were:
• 2018-2021- 117 regions added
• 2021- Entry in Pakistan
• Late 2021- entry in Libya, Iraq, Venezuela, Tajikistan, and Congo
2.3.4. Key challenges
Spotify continuously struggles with the licensing agreement disputes (Spotify SWOT<Threat<Royalty rate dispute). In 2023, Spotify removed an entire catalogue of Bollywood songs over a licensing dispute with Zee Music.
2.3.5. Key lessons
Spotify’s distribution strategy success lies in:
• Diverse digital presence
• Strategic partnerships
• Global expansion
2.4. Spotify promotion strategy
2.4.1. Spotify promotion mix
2.4.2. TV advertising
Spotify invests on the TV advertisements. In 2013, it launched first-ever TV ad, named ‘The Voice’, and since then, it has launched many successful TV ad campaigns.
2.4.3. Other traditional media platforms
Other than TV, Spotify also uses other traditional media platforms to enhance brand visibility. Here is an example of Spotify’s billboard advertising:
Spotify also posts advertisements in magazines:
Spotify mainly relies on the digital marketing for brand promotion. Spotify SEO strategy uses algorithms to make personalized recommendations by learning from the users’ listening experience.
Following table shows the number of Spotify followers over top social media platforms:
| Social media platforms | Number of followers |
| 23 million | |
| 11 million | |
| TikTok | 2.2 million |
| YouTube | 1.58 million |
In 2021, Spotify launched two highly successful digital marketing campaigns- ‘Only You’ and ‘Music for every mood’.
2.4.5. Influencer marketing
Spotify mainly relies on the Instagram and TikTok for influencer marketing. During last two years, Spotify has hired many influencers to promote ‘Spotify Wrapped’ campaign.
2.4.6. Event sponsorships
Spotify arranges cultural events, concerts, and music festivals to enhance the brand visibility. In 2023, Spotify arranged Cannes Lions Kickoff Event. Here are some pictures from the event:
2.4.7. Spotify public relations
Spotify’s PR strategy involves leveraging industry partnerships and artist collaborations to maintain a positive brand image, and generate media coverage.
2.4.8. Spotify marketing and promotion budget
In order to remain competitive, Spotify has increased its marketing budget from €111 million (2013) to €1,572 million (2022):
Source: Statista
2.4.9. E-WOM marketing
Spotify largely depends on the WOM marketing for brand promotion. Its’ strong presence over social media allows the brand to leverage the power of user-generated content.
2.4.10. Key lessons
Spotify’s promotion strategy is successful due to:
• Diverse promotion mix
• Strong presence over social media
• Ability to harness the power of WOM
• Substantial budget for marketing and promotion efforts
2.5. Spotify people strategy
Spotify develops an inclusive and diverse culture to attract the top talent. It empowers the employees through autonomy. Spotify’s people strategy focuses on:
• Talent attraction
• Diversity and inclusion
• Growth
• Learning and development
2.6. Spotify process strategy
Spotify invests on the automation, and adopts agile development methodologies to enhance process efficiency. The data-driven decisions enable the Spotify to quickly adapt to changing market trends. Learn more about what is agile.
2.7. Spotify physical evidence strategy
Although, Spotify is a digital platform, it tries to enhance the physical evidence by:
• Choosing the aesthetically pleasing web/app colours
• Enhancing user interface
• Ensuring easy navigation, and;
• Arranging live events to connect with the users in a more tangible way
3. Recommendations
Based on overall Spotify case study analysis, we propose following recommendations:
• Fix the error in ‘behind the lyrics’ feature
• Leverage the power of AI to enhance personalization and give data-driven recommendations
• Explore how to generate more revenue by monetizing free-tiered segment
• Resolve licensing agreement disputes through open communication and collaboration
• Hire more digital influencers (micro and macro) to enhance the brand visibility
• Arrange more live music concerts considering the consumers’ changing preferences
4. Conclusion
To sum up, Spotify has a well-integrated marketing strategy that leverages the power of user-generated content, data analytics, and personalized recommendations to drive the user engagement. However, Spotify is currently facing some challenges as well. Click here (Spotify SWOT) to know more about the Spotify’s strengths and challenges.
5. References
Spotify premium price per country | Cheapest . . . July 2023. (2023, September 22). How to Spotify.
Spotify Premium Family Plan Cost 2023 | Is it worth it? (n.d.).
Porter, J. (2023, July 24). It’s Spotify’s turn to increase prices. The Verge.
Forde, E. (2023, July 28). What will Spotify’s price rise mean for its recording artists and songwriters? The Guardian.
Pendlebury, T. (2023, October 24). Best music streaming service of 2023. CNET.
Peoples, G. (2022, June 10). The ledger: Spotify is embracing a new financial metric. Can investors? Radio 88.8 – Demo.
Hayden, E. (2023, July 24). The Hollywood Reporter. The Hollywood Reporter.
Hayden, E. (2023, July 24). The Hollywood Reporter. The Hollywood Reporter.
Name, A., & Kapoor, O. (2023, March 22). Spotify And Zee Music Company Clash Over Licensing, Resulting In Catalog Removal. Loudest.
Spotify sales and marketing costs worldwide 2022 | Statista. (2023, September 27). Statista.
