Saturday, June 10, 2017

Marketing: Bundle Pricing Strategy

a) Bell bundle - Cable TV, Internet and Home Phone
·        Price:  3-month promo price $109.95/month, regular price $161.95/month
·        Bundle consists of:
            1. Fibe TV – HD-capable receiver with basic and specialty channels;
            2. Fibe Internet – 100 Mbps download speed, 50 Mbps upload speed,
                unlimited monthly usage;
            3. Fibe Home Phone – 20¢/minute Canada and U.S. calling, up to 8 calling

b) Benefits/reasons why Bell offers the bundle:
·        Bell reduces cost by bundling
·        Bell sells more product because it comes as a package of services
·        Bell increases profit by giving customers discounts

c) Benefits/reasons why customers buy the bundle:
·        Customers can buy a package of services at a lower price than bought separately
·        Customers can experience better performance by having services from the same company due to seamless integration and proven interoperability
·        Customers can take advantage of simple purchase decision but also limits their choices of services

d)         Bell can improve their bundle pricing by adding a feature which allows the customer to customize his/her own bundle. For example, the Fibe TV channels should not be basic channels + specialty channels but instead, the customer should be allowed to pick one by one each channel. Channels with high demand should be priced more and channels that are not in-demand should be priced substantially lower and not equal or almost equal. The same goes for the internet, the customer should be allowed to pick his/her own speed and data. Once the customer has made the customization, then the bundle price should be adjusted accordingly with fairness and competitiveness in mind. The pricing of the big communications companies such as Bell, Rogers, Shaw and Telus is based on oligopoly.  These companies price themselves competitively within Canada but they should lower down their prices because other communications companies in other countries with the same comparable services have pricing that is substantially lower.
            The lower pricing strategy recommended can both benefit the company as well as the customers. The company could improve its reputation and not be viewed as greedy corporation. Customers on the other hand can save some money and have satisfactory services as well. The company could then attract more customers from their competitors because of the benefits and savings which would then cause the competitors to lower down their bundle prices and allow more freedom and customization to customers.

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