Week so
far:
This has
been a very hectic week where we were finalizing our submission for our
sections of the marketing plan. I saw excellent team work and co-ordination within
my team and some of the harsh realities of marketing decisions became very
apparent. Making decisions in this fast paced technology world, where the
consumers have more choice than they can even comprehend, makes the job of
decision making not only painful, but extremely crucial in ensuring success in
the market place.
The
topics for this week are primarily around Pricing. I read Chapters 7,8 and 9
from the handbook and also Principles of Pricing from the course pack. I also
watched Prof. Talbott’s video on Pricing, where he talks about different
pricing options like Value Pricing, Product Line Pricing, Captive Product
Pricing, Optional Product Pricing, Product Bundle Pricing etc.
Pricing:
Competition
in the wireless industry is fierce and price wars are very common. In 2008,
Sprint, the wireless service provider was in turmoil after merging with Nextel
and Dan Hesse had come on as the CEO of Sprint-Nextel. Sprint was continuing to
lose customers and ‘churn’ was one of the biggest issues for Sprint in the
market place. There were countless issues with customer service and billing was
a common concern, where the customer received a higher bill than was
anticipated, which was attributed to higher data or voice usage than what their
chosen plan allowed for.
Dan Hesse wanted to promote a clear brand
identity for Sprint and win back the customers and improve the perception on Sprint’s
customer service. He introduced the ‘Simply Everything Plan’ which
revolutionized the wireless industry and laid the foundation for Sprint’s
comeback, by introducing a flat pricing for unlimited usage. This was a pricing
plan that did away with all the confusions around the pricing plans – as the
numerous pricing plans that were being offered by Sprint confused the
customers and they became apprehensive
as to what was hidden under the covers or in the small prints.
The Simply Everything Plan, the first plan to offer unlimited data for a fixed price in the wireless industry, at a time when data usage was growing tremendously with the smart phones beginning to crowd the market and voice was being reduced to a commodity, was indeed a pricing revolution that gave Sprint a unique identity and branding. The comparisons of the pricing plans were made with the top players in the wireless space - AT&T and Verizon - to show the pricing advantage that Sprint was offering.
Dan Hesse also appeared on Sprint’s ad campaigns spreading the
word on the Simply Everything plan. The ads were run on the national TV channels and also promoted during premium time slots during NFL, NASCAR etc in addition to the Sprint.com sites, news papers and magazines.
In one
of the ads Hesse says: “The other day, I
looked up the word unlimited in the dictionary. Nowhere in the definition did I
see words like metering, overage, or throttling, which is code for slowing you
down. Only Sprint gives you true unlimited calling, texting, surfing, TV and
navigation on all phones.”
He concludes with the
question: “Why limit yourself?”
A link to another one of the Ads: http://www.phonenews.com/video/simply-everything-dan-hesse-720p.mp4
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