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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 for 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
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Case answers for HubSpot: Inbound Marketing and Web 2.0
This case solution includes an Excel file with calculations.
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 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 satisfying the needs of two very different customer segments, each of which is posing 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. But the problem they faced is that the customers obtained an initial burst of value and canceled their subscription within several months. The diverse segments they had presented opportunities which they were under-utilizing.
- Use of traditional outbound services: Currently HubSpot is fully focussed on 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, Facebook grader.
- They have limited staff and resources
- They are entirely reliant on the use of 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 charge monthly for their services customer retention poses a threat
- Competition from
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