Presentation I Joseph Asian avgas the COM of Memorized_ Memorized Vass the market leader in providing broadband services. Utilize, a small mobile-network operator entering into the broadband market by Offering broadband service to business customers who were willing to leave there current provider and enter into a long term contract. The CEO Gerald Signer was having a problem due to that price attack because he was thinking that the word free- could get attention from business customer.
Joe and Memorized division heads Adam Duper, Inline Richard and Frank Lopez conducted a meeting to provide lotions for this coming issue. Memorized had to face that challenge either using pricing strategy or having any other aspects The various courses of action discussed between them was as follows:- Ignore the move of Utilize. Offer discounts to customer either by lowering the price or providing added services. Ay offering something more compelling MARKET SHARE Market share of Utilize in landlines is and Memorized is 85%.
Adam was not agreeing to cut the prices sass% market revenue for landlines. In mobile market, share of Tilted and S%of Memorized. Divisional heads cares more about their individual turf rather than working getter PROBLEM Utilize is launching a new tell-communication service i. E. BROADBAND and publishing the ad “Free broadband for ever with Utilize! Save at least ?450 a year when you switch from Memorized! ” Could Utilize become threat to Memorized?
If customers decide to migrate to Utilize Memorized will lose their landlines revenue and connection between local exchange and their home or office DECISION TO BE TAKEN Should Joe ignore or respond to Tulip’s bold move? ISSUES INVOLVED The main issue unwilled here is that, the move taken by Utilize can create a new price war in the broadband market. As is given in the case the customers of Memorized admire the service tooth company, but they are also saying that the service is expensive. So the free offer provided by Tilted can attract a large customer base and it can also force the customer of Memorized to switch the company.
So Memorized can lose their market share also, Short Term Problem’ -For short term the problem can be treated as initiating price war. Long Term Problem: -In case of long term, it can cause a loss of customer base of Memorized as they can switch to Utilize, if no step is taken by Memorized. ALTERNATIVE COURSES OF ACTION OPEN JOE:- I The first action he can take is ignoring the move Of Utilize as it is a small company and the Memorized is the Market leader in broadband market with share Of 60%. . The next move he can Offer is by providing discounts on the current price so that current customers can not switch to Utilize. 3. He can also offer free broadband services by following the competitors move. 4. He can also provide the value added services by charging the same price, so that the customers can be delighted. RECOMMENDATION: Provide some value added service to gain added revenue and also to ensure that he customer does not switch. Provide them with different kinds of packages.
Packages are the price differentiators, package similar to that of the competitor Utilize should he one of the package, packages with different price will differentiate themselves with different value they provide, like speed differentiation, volume based package. Different package caters different customers needs, and also ensures more revenue from them Implement a new incentive scheme for the three division heads, such that Upton% of their incentive now depends on the overall performance of Memorized, with the rest pending on their individual division’s performance.
This will give each division head a direct interest in working cooperatively with their peers for the greater good Of Meridian Value added services Will attract new customers as well as ensures the customers to be loyal, VASS service such as video on demand, games on demand, music on demand. Reduction in cost can be a logical Step. – Structure and operation of the company should be restructured-This will ensure the increase in profit margin which can be in turn be useful in giving discounts to customer
