Omnitel Case Study Essay
Ans 1).
Omnitel entered as a cell phone operator in the Italian market in December 2000. The company introduced its service with plans that were very similar to the incumbent service provider, TIM. Omnitel’s perceived competitive edge was customer service focused on the areas of personal touch, low waiting time and one-stop calling for all questions. With this perceived advantage, Omnitel was targeting high value customers who wanted a better quality customer service than TIM what could provide. In the 6 months after the launch of their service, Omnitel was able to acquire 180,000 customers which accounted for a disappointing 4% market share.
The launch resulted in low market shares because customer service, which Omnitel perceives as its competitive advantage, is not a deciding factor for most consumer segments in the Italian market. …show more content…
Therefore, the value proposition of Omnitel did not appeal to these customers
2) 19% of TIM’s existing customers were very unsatisfied with the cost, but were unwilling to switch to a private operator.
3) The customers who were willing to switch mobile operators (Monthly/Peak segment) accounted for 35% of TIM’s current user base. But service, although an important factor for the segment, was not one of the 3 most important factors in their decision making.
In essence, Omnitel entered the Italian market with a value proposition based around customer service which was not one of the most important decision factors for most consumers in the market at that time. This was an underlying reason for their disappointing results in the first 6
Omnitel entered as a cell phone operator in the Italian market in December 2000. The company introduced its service with plans that were very similar to the incumbent service provider, TIM. Omnitel’s perceived competitive edge was customer service focused on the areas of personal touch, low waiting time and one-stop calling for all questions. With this perceived advantage, Omnitel was targeting high value customers who wanted a better quality customer service than TIM what could provide. In the 6 months after the launch of their service, Omnitel was able to acquire 180,000 customers which accounted for a disappointing 4% market share.
The launch resulted in low market shares because customer service, which Omnitel perceives as its competitive advantage, is not a deciding factor for most consumer segments in the Italian market. …show more content…
Therefore, the value proposition of Omnitel did not appeal to these customers
2) 19% of TIM’s existing customers were very unsatisfied with the cost, but were unwilling to switch to a private operator.
3) The customers who were willing to switch mobile operators (Monthly/Peak segment) accounted for 35% of TIM’s current user base. But service, although an important factor for the segment, was not one of the 3 most important factors in their decision making.
In essence, Omnitel entered the Italian market with a value proposition based around customer service which was not one of the most important decision factors for most consumers in the market at that time. This was an underlying reason for their disappointing results in the first 6