Joseph Ulan was the CMO of Meridicom Meridicom was the market leader in providing broadband services. Telzip, 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 Segner 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 Meridicom division heads –Adam Dupree, Emeline Ricard and Frank Lopez conducted a meeting to provide solutions for this coming issue. Meridicom 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:- A) Ignore the move of Telzip.
B) Offer discounts to customer either by lowering the price or providing added services. C) By offering something more compelling.
TelZip is launching a new tele-communication service i.e. BROADBAND and publishing the ad "Free broadband forever with TelZip! Save at least €450 a year when you switch from Meridicom!"
Decision to be taken
Should Joe ignore or respond to TelZip's bold move?
The main issue involved here is that, the move taken by Telzip can create a new price war in the broadband market. As it is given in the case the customers of Meridicom admire the service of the company, but they are also saying that the service is expensive. So the free offer provided by Telzip can attract a large customer base and it can also force the customer of Meridicom to switch the company. So Meridicom 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 meridicom as they can switch to telzip, if no step is taken by...