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 ²
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:- Ignore the move of Telzip.
Offer discounts to customer either by lowering the price or providing added services. By offering something more compelling
Market share of Telzip in landline is 5% and Meridicom is 85%. Adam was not agreeing to cut the prices as70% market revenue for landline. In mobile market, 25% share of Telzip and 5%of Meridicom.
Divisional heads cares more about their individual turf rather than working together
TelZip is launching a new tele-communication service i.e. BROADBAND and publishing the ad "Free broadband for ever with TelZip! Save at least € 450 a year when you switch from Meridicom!"
Could Telzip become threat to Meridicom?
If customers decide to migrate to Telzip Meridicom will lose their landline revenue and connection between local exchange and their home or office DECISION TO BE TAKEN
Joe ignore or respond to TelZip's bold move?
ISSUES INVOLVED :-
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...