MKTG 426 Exam 1(Errorless answers)

Versioning is possible only when: correct answers Product is not a commodity aka steel, copper, or coffee (vendor should have the ability to add unique features to different versions) Customers must be heterogeneous (diverse) in their valuation of the features in those versions. Flanker Brand correct answers a new brand introduced into the market by a company that already has an established brand in the same product category. virgin case: Identify and comment on the drivers of customer dissatisfaction in the industry. (5) correct answers -customers hate hidden fees (taxes, universal fees) - Peak time differentials -Bucket pricing system often lead to confusion with customers and so they are penalized -off peak hours decreasing overtime -penalties/fees to cancel contract with provider churn rate correct answers the amount of customers or subscribers who cut ties with your service or company during a given time period. Virgin mobile: Why have the big carriers responded the way they have to the problems you observed in Question 1? economic rationale? correct answers The big carriers including AT&T, Cingular, and Verizon carry so much of the market share. Out of the 103 million subscribers in the United States all three of these big carriers have of market share of at least 20 million subscribers. The big carriers have such a monopoly on the cell phone industry that it is not necessary for them to try to improve their customer dissatisfaction rates. Virgin will spend 5 billion a year to fix customer satisfaction so the big carriers are avoiding these costs and keeping customer dissatisfaction. Comment on Virgin's Value Proposition, and its channel and merchandising strategies correct answers Value proposition: appeal to youth, packaging (colorful and bright), create loyalty, hassle free sale, available at places frequently visited by youth, and VirginExtras - Integrate entertainment with basic telephone services. targeted 14 to 24 year olds with "live without a plan" campaign and sold phones prepackaged in stores the target consumers frequented so they didn't have to go to a typical phone store where they would have to pay sales people commission, had fun packaging and point of sale displays and special features available through MTV. The channel and merchandising strategy are more affordable to the young audience since they can purchase the phone on their own or attract middle-age parents with young teenage children. Because the young parents and children have the option of seeing which phones they can buy through a starter packet and avoid speaking with the sales representative, they feel more comfortable and have the option of purchasing the