Case Study 2 – New Product Telecon Service Configuration and Pricing

Business Needs

In an effort to establish a new hosted web-based conferencing services in the global marketplace, a telecom services provider needed information for specific decisions relating to configuring, branding, bundling and pricing the offering. The web conferencing service was a new business model – a “pay as you go” offering where the customer uses the software on an as needed basis, but does not have to purchase and maintain the software at his site. The new service provider would serve as the “host” for the software, and the customer would pay a service fee for use on demand, as needed. The new telecom provider faced several challenges in launching this offering, specifically: establishing itself versus existing providers, identifying how best to configure and support the offering and determining a price structure and range for the offering to both generate business and optimize profitability.

The Study

In order to address the business needs, two phases of research were conducted, an initial qualitative phase followed by a quantitative e-mail recruit to web survey.

The First Phase -- Qualitative exploration

consisted of four focus groups in the US and 12 personal in-depth interviews in the EU among decision makers and potential users of the new service. The qualitative learning was used both to understand and explore decision-making and drivers, as well as to test and refine potential concept offerings, bundles and feature combinations for use in the subsequent quantitative stage of research. Information yielded in this phase identified desirable features / attributes as well as unmet needs in existing conferencing products.

The Second Phase – Quantitative Web Survey

utilizing an e-mail recruit from a business panel. 1000 interviews were completed in US, UK and Germany. Qualified respondents were business decision makers for telecom services and/or web-based conferencing.

Following an initial battery of questions relating to current web conferencing behavior and attitudes, we gathered configuration and pricing information. Data were gathered through a “choice test” type of questioning where respondents compare and choose which of several alternative scenarios they would buy. Scenarios were constructed to reflect the various options and prices that were being considered, as well as those available from competitors. All scenarios were identified by a specific brand to determine the impact brand has on choice of service.

Finally, a “probability model” was constructed to show the differences in “relative market share” that would result from various changes in product configuration.

The End Result

The most compelling specific service offerings options distinguishing the new service from the competition were identified, designating both desirable features and optimal pricing. Additionally, we were able to identify the target market for the offering in terms of company size and industry as well as the value propositions, messages and positioning to be employed.