Hi,
It's Christmas and New Year time and as expected, it's a busy week or two for the telecom companies around the world. I usually use USPcard to call people back home in India. They have a decent quality and charge 9 cents a minute which was much better than Reliance's 13 cents. I was excited to see Airtel launching their new service to India and that too for a throwaway price of 7.9 cents and double talk time for the first month! I immediately bought Airtel and I realized that Reliance has also slashed their prices. It's party time for people calling India! Suddenly a thought came to my mind... Wait I haven't heard anything from USPcard yet! What's happening. I analyzed a few things: Service, Cost, Bank Balance, Brand name, Marketing of the product. I realized that USPcard is lacking in all these aspects at this point. Their main selling point was their cost. And now they have lost their cost advantage to Airtel and Reliance. They also donot have deep pockets like Reliance and Airtel to sell their service at a loss to retain their customers. What are the steps USPcard can take to survive the price war and retain/increase their customers? What would you have done if you were a USPcard CEO at this point? Would you have invested in improving the internal processes/customer care/marketing/call quality or anything appropriate? Would that investment have met the cost/benefit analysis? These kind of challenges are supposed to come anytime soon in our careers. So your comments are welcome.
6 comments:
You must definitely thank Airtel for this great revolution in Calling India.
Airtel CallHome has proved to be a boon for consumers.
Anyone with a little undestanding(even me with my miniscule understanding) of business knows that if you are small player, you can never compete with the big ones based on price. You have to create a niche market for yourself. What USP card should have done earlier was to improve its call quality and aggressively market itself (it could have gone to the extent of comparing itself interms of price and quality with Reliance and make its brand more visible - i also understand this could have been expensive). This could have blunted the effect of Reliance's price change. Anyways, the question is what can be done now.
I don't know how strong this company is financially, but the only way for it to stand (atleast according to me) is to improve the quality to better than Reliance standards (if it can) and aggressively market with its current rate. If it can they can reduce the price to atleast the level of Reliance, but only if it can still make money at this rate. If not, improving quality and very aggressive marketing is an option (whether this strategy will work is a question in itself ;)).
I am also waiting to see what others think about this issue and SAPAN thanks for an interesting question and keep posting.
I have an idea for UPS. The one thing that bothered me a lot, while calling to India is I have to dial the reliance number first and then enter each and every digit of the phone number that I am calling even tough the number is stored right in my cell phone. I can not just choose the number from my contacts after I have dialed reliance 800 number. It really makes me furious if after all this work the line is not available and I have to reapeat the process again. I did that once for 5 times and I was pulling out my hair by the 5th call. I would suggest USP to come up with some user freindly attributes like this, which would attract customers like me :) also they can do something about recharging the card so that I dont have to login to the website everytime and charge my phone card to make a call.
i think as a first step towards staying in business USP card has reduced the price to 7.5 cents and has sent its current subscribers (mailing list) about the change - a small step towards marketing but a beginning in the right direction nevertheless!!!
Even big players like Sony, Moicorsoft (Microsoft Zune player) could not compete with Apple ipod. It does not matter if you are a big player or a small player. If you have quality in your product, it will always win. iPod was a revolutionary product to hit the market at the right time. I am absolutely confident that iPhone will dominate the phone market after its released. Apple rocks. Steve Jobs is creative as hell.
USP has responded by shutting its operations and running away with all the customer's money!!! Their cards weren't working, no reply from them on toll-free numbers or e-mails either... and now even their website doesn't exist. Wonder if this is a scam or running away with others money!!!
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