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Case Study

The Netflix case involved Netflix raising their subscription fees, which negatively impacted customers and led to large customer cancellations. A more appropriate pricing model for Netflix could have been pay-per-use to avoid customer backlash from the price increase. The Abercrombie & Fitch case showed their pricing problems stemmed from giving too many discounts and promotions while having high expenses, indicating a prepaid pricing model may have helped. For telecom companies, price discipline does not reliably measure shareholder value as customer satisfaction influences future revenue and shareholder satisfaction. Key aspects of strategic pricing organizations are clear decision rights and skills/capabilities of team members regarding products, markets, customers and linking pricing to business strategy.

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2K views3 pages

Case Study

The Netflix case involved Netflix raising their subscription fees, which negatively impacted customers and led to large customer cancellations. A more appropriate pricing model for Netflix could have been pay-per-use to avoid customer backlash from the price increase. The Abercrombie & Fitch case showed their pricing problems stemmed from giving too many discounts and promotions while having high expenses, indicating a prepaid pricing model may have helped. For telecom companies, price discipline does not reliably measure shareholder value as customer satisfaction influences future revenue and shareholder satisfaction. Key aspects of strategic pricing organizations are clear decision rights and skills/capabilities of team members regarding products, markets, customers and linking pricing to business strategy.

Uploaded by

arisu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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The Netflix Case

1. What is the pricing problem present in the case?

The pricing problem present in the Netflix case they decided to raise the amount
fees. The public reaction was negative about the Netflix this change crossed a critical
change in the minds of consumers and create a large gap in price from the past. Pricing
change has a big impact to Netflix. The Netflix’s

2. What is the appropriate pricing model which could have helped Netflix avoid the
given pricing problem?

The pricing model which could use of Netflix is Pay per use. Netflix had a really good
reason for the hike. Not in the end, it doesn’t matter, especially to the people who are
paying significantly more for the same service. A price increase should never be an on
the fly decision. Pricing your creative and design services effectively is a difficult
business. The appropriate pricing model which could have helped Netflix to avoid
pricing problem is the Pay per use can be profitable, and it’s a step toward value-based
pricing and higher profit levels. If you do similar work for similar clients routinely. You
can cut costs and increase profit with this approach. It can also work well if you’re good
at time estimates, but most of us aren’t. no company can avoid raising prices, but with a
little planning, smart ones can avoid negative feedback from the customers.
The Abercrombie & Fitch Case
1. What is the pricing problem present in the case?

The pricing problem presented in the case is that they gave a lot of discounts to
the consumer also they lot of promotions as well as their expenses are too high.
Therefore, they not even earn any profit from their sales due to their massive expenses.
The weaknesses of Abercrombie and fitch are has not created culturally diverse
atmosphere.

2. What is the appropriate pricing model which could have helped Abercrombie
and Fitch avoid the given pricing problem?

The appropriate pricing model which could uses of Abercrombie and Fitch to
avoid the given pricing problem is prepaid system. This pricing model involves a
consumer to either buy a card or load up a free card with a certain amount of money,
and then draws the balance down with each purchase. Prepaid options can have
substantial cost reductions over postpaid counterparts because they allow customers to
monitor and budget usage in advance.

3. What is/are the indicator/s of crisis present in the case?

The indicator of crisis present in the case is Selling pressure. Because they force
to sale in order to get pushed harder and harder to sell more units at the same time
when buying resistance from the customers grows. It also occurs when the majority of
the trends are selling, indicating that the majority think the market price will decrease.

4. What is the appropriate course of action should Abercrombie and Fitch


undertake based on the concept of pricing in crisis?

The course of action should Abercrombie and Fitch undertake based on the
pricing crisis are Leadership reaction, eliminate members for value differences.
Engagement, address issues with action. Reward allocations, reward model behavior
and punish bad behavior.
A Telecom Case
1. What is the effect of the price discipline initiative of telecom on their
shareholder value?

The telecommunications industry is at the forefront of this transformation, both as


an industry witnessing large scale change in its market environment and as a key driver
of worldwide telecom. For instance, slow or uneven adoption of digital communications
or the internet. For customers satisfaction is very important to fulfill their satisfactions.
However, the price discipline does not measure shareholder value reliably. The
behavior of satisfied customers influences the level, timing and risk of future and
satisfaction of shareholder value.

2. What is/are the fundamental building blocks of a strategic pricing


organization present in the case?

The building blocks of a strategic pricing organization present in the case are
Decision Right and influence, to create an effective pricing organization, top
management must ensure that decision rights are clear. The other one is Skills and
capabilities a pricing organization requires people who possess hard and soft skill.
Team members must also know about the company’s products, markets and customer.
The ability to develop pricing that reflects the business strategy and the skills to identify
and evaluate opportunities to change pricing.

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