Question
Topic: Strategy
Intgrated Mktg/bundling Strategy For Gas N Telecom
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Details: The gas companies are virtual monopolies operating for the past 4-5 years.Product is 'piped natural gas' sold to domestic, commercial and industrial segments.CNG is another product which is currently successful becoz of government regulations.
Challenge:The entry barrier for customer is very high (over 10000 Rs. to recover the capital cost incurred in laying pipeline infrastructure), the category is boring,customer base is over 400000 but customer database is non-existent, the selling point is convenience and the lower running costs due to cheap gas, key constraint is pipeline infrastructure & gas availability,gas applications are very limited (only cooking and water heaters currently).How to increase topline?
The telecom company is a market centric company offering broadband connectivity(main business), internet telephony, e-education,dial-up connectivity.
Strategy:Trying to cross-sell/up-sell to existing customers and bundle products for new customers - but faced with problem of limited size of overlapping segments, very poor market segmentation data and misalignment of benefits across the 2 companies.Identified builders of middle/upper class housing as a potential segment where bundled sales can be made - but the gas monopoly does not see 'material benefits' in bundling its product (Which sells anyway) with telecom.
SOLUTION WANTED:Want to develop a solution for the bigger market which adds value to both the companies and also to the consumer.The per capita income of almost 80% of the market is one tenth of the developed ccountries -gas is a product which everyone can use, telecom (broadband) is for a limited market.
P.S. The business model of the gas companies is heavily front loaded (most profits made initially) but for the telecom company it is back-loaded (most profits made if the customer continues using its service - and does not switch to competitor or switch off the segment)