The Economics of Crm: Iusacell Case

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The Economics of CRM: IUSACELL case
Discussion Questions:
1.Analyze IUSACELL's marketing performance over the past two years.

â–¶ STP Analysis
Segmentation:Targeting
RegionalRegion 5, 6, 7, 9
Principal Use (Business or Personal)Business
Socio-Economic levelA ~ C (Refer to Exhibit 6)
Positioning - Full Service communications from a beginning in cellular Business ▶ 4P implementation Strategy
Product – Basic Service, Value-added Service, Roaming, Accessories Price – Three Packages
Placement– Distribution Channel (Customer Service Centers, Corporate Representatives, Distributor) Promotion – ‘Lease program' for hand-held phones (NP1/month)

â–¶ Performance Analysis

Financial Performance
199119921993
RevenuesNPs 366,849NPs 559,682NPs 710,387
Operating
Income117,659151,251102,882
Net Income72,11692,355(93,231)
Average Monthly Revenue/subscriber750753647

During the year 1991 and 1992, IUSACELL implemented strategy like value-added service to differentiate themselves, resulting an increment of Revenue and Net Income. In the year 1993, due to high acquisition costs and losing valuable customers, Net income and Average Monthly Revenue/subscriber have been dropped. Non Financial Performance – Growth(# of Subscribers), Penetration %, Churn Rate

199119921993
Subscribers
(end of period)63,735112,412127,599
Nonwireline Penetration0.11 %0.19 %0.21 %
Churn RateN/A3.1%3.6%

In order to increase No. of subscriber, ISUACELL implemented a lease program on a long-term basis for hand-held phones (NP1/month). From year 1991 to 1993, although Growth (# of Subscribers) and % of Penetration have increased, the market share was lost by increasing churn rate.  In order to retain and develop current Customers and grow in continuous revenue, Customer service initiatives are positively necessary.

3.Evaluate IUSACELL's customer service initiatives and their...
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