Question

Answer the following questions with Reference and citations.

1. Selling a product is great, but generating recurring revenues is better. Discuss the value in developing a ‘cell phone monthly subscription’ business model. Name another example using the same model.

2. Discuss the problems faced the newspaper industry and the options open to it to make money.

Answer 1

Answers for your questions are as below:

1. Creating cell phone monthly subscription business model is classic case of shaping the market offering#

This value can be created through product bundling pricing. We can take Apple's i Phone as an example.

Product- i phone.

Monthly subscription model are as below:

Subscription ot i-music, Cloud storage. These are charged on monthly basis based on the customers chosen option of the subscription. In this case customers are bound to keep paying as per subscription and this given a monthly revenue to the company where in selling the main product also brings the monthly revenue.

2. Similar problem is faced by newspaper industry where in they have launched the digital version of the newspaper but this is based on subscription opted. There are free subscription where in user have option to visit limited number of news daily and there is paid subscription which allows user to read as many news which are allowed as per user subscription.

Later on news industry also came up with the bundle offers where they different pricing was done for different group of offering. E.g. for daily news there is a basis subscription charges and if user is also interested in business news then they will have to pay extra subscription charges.

#Shaping the market offering: Kotler Keller Marketing Management 14th edition