The Pricing component is a marketing strategy that organizations put to their advantage in a competitive business environment (Afuah 200). The case study identifies a market invested with rivals such as Vodafone and new entrants offering the same mobile products and services. DoCoMo had identified the pricing component and inherently priced its products tailored at capturing a large market share resulting in the business organization gaining a strategic position in the market.
This strategic component is uniquely identified in the pricing mechanisms adapted by the organization in the Japanese market. With attractive monthly access charges of 300 yen (US $ 2.48) in addition to the varying access fees ranging from 0.3 yen for a data packet of 128 bytes to 60 yen for funds transfer, loyalty to the company’s products had been created.
Strategically tailored fee ranging from 100 yen (US $ 0.83) to 300 yen (US $2.48) was evident form the above case study (Porter 346). This unique pricing mechanism brought the company to a strategic level ahead of its competitors. New entrants found slim chances of survival in the competitive environment.
With tailor made prices blended with competitive knowledge on target market needs, the business executives saw the company rake in profits. This helped it sustain marketing activities leading to higher revenue generations, a larger market share, and improved market strength. That characterized KPN mobile and its subsidiary companies. Product differentiation and unique pricing mechanisms integrated in the Japanese market saw increased usage and bigger profit margins. The marketing strategy had worked well for DoCoMo.
A strategic market position characterized KPN, NTT DoCoMo, in addition to other subsidiaries. Pricing, value addition and product differentiation were unique marketing elements which strategically placed the mobile company in a leadership position in the market.
Customers determine a business organization’s market share, profitability, product and service image, acceptability, and customer buying behavio.This is applicable in a market strewn with competitors who know well what they want. The competitors wage business wars to gain higher profits, a bigger market share and leadership position. DoCoMo and its subsidiary companies had conducted research in the target market quite well.
This unique undertaking can be clearly illustrated in the way DoCoMo had designed mobile sets with different features. The prices offered were very attractive and were tailored for different markets (Porter 6). These in addition to other devised mechanisms propelled the company to success. Features integrated in the mobile phones included larger screens for the i-mode with target markets including Germany and the Netherlands.
In addition, good quality display characteristics, improved service capabilities were features found in the i-mode technology. Other mobile set incorporated features such the capacity to send and receive 1000 emails with a 160 character capacity. This is clearly illustrated in the case study According to the case study on (Porter 350) with entertainment features particularly for the Japanese market incorporated.
The need to differentiate KPN’s products and services to suit identified target market steered the company to success. This was illustrated in the company’s ability to tailor products as competitive substitutes. In addition they could substitute services offered by other companies such as Vodafone.
The company’s 3G mobiles were competitively ahead of FOMA’s 2GHT bandwidth capacity offered by competitors (Porter 350). According to the article on Porte (350), the company placed emphasis on its strengths identifying its market position with strength and profitability.
The supply chain was identified with capable and reliable marketers and suppliers. Subsidiaries companies were important components. They were integrated, making the company see succees in a wider market share for its differentiated products. Substitutes such as different versions of web browsers for mobile phones, hybrid technologies such as WAP and e-HTML, and a range of others were also integrated.
Afuah, A. Business Models: A strategic Management Approach. University of Michigan ® McGraw-Hill Irwin Boston Burr Ridge, 2003.
Porter, Michael. E. Competitive Advantage: Creating and Sustaining Superior Performance. 1st ed. Free Press, 1998.