The Upstart’s Assault

Analysis
 
 
Section A
Group c
Submitted By:
Vivek Singh
Dipesh Bagul
Ramit Mathur
Yogesh Agrawal
Nagendra Singh
Ishan Khartadkar
 • Situation:
• A market leading firm in telecom industry facing attack
of new entrance in same segment using Penetration
Pricing Strategy
Meridicom TelZip
 Known & trusted Market leader  New entrance
 Broadband Service not free  Free Broadband Forever (Only
 5% Market Share in Mobile Pay for Landline)
phone  25% Market Share in Mobile
 85% Market share in landline phone
 Have 60% Market share in  5% Market share in landline
Broadband which contribute 25%
of top line
 5% Market share in Mobile
Issues Involved:
• Declining Market Share.
• All other competitors may also cut their prices
& cause severe impacts.
• Customer of Meridicom are not fully satisfied
• Market follow Meridicom trend.
• Threat is not only in broadband, but also in
landline and mobile.
Conti..........
• User are quality and convenience concern.
• Inter-Department Coordination is weak.
• Customer want predictability.
• Services are not properly bundled.
Alternatives:

• Reaction – Price Cut

• Bundled and Option Pricing
• Ignore
• Discount rate
• Attack the rival and kill it
• Multiple Branding
• Repositioning as Premium Brand
• Give Economic value to customer
• Penetration strategy/price cut
INTRODUCTORY OFFERS BY
RELIANCE
 1. DHIRUBHAI AMBANI PIONEER OFFER
• FREE DIGITAL MOBILE PHONE
• UNLIMITED FREE INCOMING CALLS
• BILLING AT 15 – SECOND PULSE RATE
• ONE – TIME DEPOSIT OF RS. 3000
• TELEPHONY CHARGES WERE RS. 600 PER MONTH
• OUTGOING CALLS AT 10 PAISE FOR 15 SECONDS
• LONG DISTANCE CALLS AT 40 PAISE PER MINUTE
TO ANY RELIANCE PHONE ONLY
• FREE TEXT MESSAGING
 2. MONSOON HUNGAMA SCHEME
• CAME OUT IN 1ST JULY, 2003
• CUSTOMERS WILL GET A MOBILE AT RS. 501
• MONTHLY RENTAL OF RS. 200
• BIGGEST PROMOTIONAL SUCCESS IN THE
HISTORY OF MOBILE PHONES
• 1 MILLION HANDSETS SOLD IN 10 DAYS
• PRICES OF GSM HANDSET MOBILES FELL
 3. PRE – PAID OFFERING
• INTRODUCED IN FEB 2004
• GAVE CUSTOMERS FREE RECHARGE VOUCHERS
NEARLY THE COST OF THE HANDSET
• CUSTOMER HAD TO PAY RS. 3500 FOR THE HANDSET
• FREE RECHARGE VOUCHERS WORTH RS. 3240
• AUTOMATIC ROAMING IN INDIA WITHOUT ANY
EXTRA CHARGE
• Discount rate price /service bundling
INDIAN AIRLINES
• Indian Airlines came up with a new apex fare
slab for purchase of tickets in eight sectors, 28
days in advance — two days less than
those offered by Air Sahara and Jet Airways.

• The D-28 fares would be available for sale on

one way or round trips as against round trip fares
offered by Air Sahara.
 JET AIRWAYS

• Frequent Flyer Scheme

• APEX pricing Scheme
• Cash Back Offer
• Jet Privilege Scheme : Extended its points partnerships to
Accor Hotels and Langham Hotels International.
• Internet Auction
 What is Apex?
Apex IS ADVANCE PURCHASE EXCURSION FARE. It is a non-
cancellable return fare offered at a heavy discount on the conditions:
• Tickets are purchased at least 21 days in advance
• Minimum gap between departures range from one to six weeks.
• Maximum gap between departures is 12 to 24 weeks.
• There are no stopovers.
 Effects of APEX
•Led to increase in the number of customers.
•Loss of airline companies minimized as with the increase of
passengers the aircraft ran to their full capacity.
•It brought a veritable boom in tourism sector.
•It was able to lure the middle class people who preferred
to travel by trains.
AIRSAHARA
• First Airlines to start innovative Pricing model rather
than APEX Model.
• Sixer and Super Sixer Schemes in 2002 – Six refers to
the six zones for 25k.These schemes offered more to the
customers than their competitors.
• Square Drive Scheme – ( Family Pack) 4k-2.5k
•“Steal a Seat” - Bidding process started from Base price –
Re 1/-
The trend then followed by…..

May 2005

May 2005

Oct 2005

Oct 2005

Aug 2006
Key characteristics of low cost airlines
•High seating density and load factors
•Uniform aircraft types (usually the 737-300)
•Direct booking (internet/call centre - no sales commissions)

•No frills such as “free” food/drinks, lounges or ‘air miles’

•Simple systems of yield management (pricing)
•Use of secondary airports to cut charges and turnaround times
Recommendation:

Multiple Branding
JetLite, a wholly owned subsidiary of Jet
Airways India Ltd, was acquired by Jet Airways
in April 2007. Positioned as a Value based
Airline, JetLite promises to offer value for
money, economical fares, 'Buy on board' in-
flight meals, in-flight shopping and much more