The case 'HubSpot: Inbound Marketing and Web 2.0' discusses inbound marketing. The concept uses online tools and applications designed to attract prospective customers to a business. In this case study, HubSpot was in the limelight seeking the company's development. In its quest for growth, it faces problems as to its market segmentation, target customers, and pricing strategy, among others.
Thomas Steenburgh; Jill Avery; Naseem Dahod
Harvard Business Review (509049-PDF-ENG)
May 15, 2009
Case questions answered:
- Firstly, HubSpot is targeting a diverse pool of customers, and it is in a dilemma if it should focus on specific customers. Secondly, it needs to understand if it should change its pricing strategy and charge more for its specific services. Lastly, it needs to assess if it should start using a traditional outbound marketing strategy along with its current strategy.
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HubSpot: Inbound Marketing and Web 2.0 Case Answers
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Problem Statement – HubSpot: Inbound Marketing and Web 2.0
Firstly, HubSpot is targeting a diverse pool of customers, and it is in a dilemma if it should focus on specific customers. Secondly, it needs to understand if it should change its pricing strategy and charge more for its specific services. Lastly, it needs to assess if it should start using a traditional outbound marketing strategy along with its current strategy.
Causes of the problem:
- For focusing on specific customers: Currently, HubSpot is targeting a market that is potentially very large and involved in satisfying the needs of two very different customer segments, each of which poses a different challenge. The company is very small, and it has very limited resources.
- For changing its pricing strategy: Currently, HubSpot is charging $250 monthly for its services to Owner Ollie customers and $500 monthly for its services to Marketer Mary customers. However, the problem they faced was that the customers obtained an initial burst of value and canceled their subscriptions within several months. The diverse segments they had presented opportunities that they were under-utilizing.
- Use of traditional outbound services: Currently, HubSpot is fully focussed on a 100% inbound marketing strategy, which is hindering them from increasing their scale of reach, which they could achieve along with the use of outbound market strategies.
- Low cost and ease of use of the services
- Solid financial backing from venture capitalists
- Specialized inbound marketing tools such as keyword grader, website grader, Twitter grader, and Facebook grader.
- They have limited staff and resources
- They are entirely reliant on the use of an inbound marketing strategy
- The market potential is 2.3 million customers ranging from very small to large clients. Even if they are able to tap 1% of the market, then monthly revenue could increase by $7.5 million.
- Since HubSpot charges monthly for its services, customer retention poses a threat.
- Competition from…
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