Our only competitor in District 6SW currently provides bundled services at $84.95. We are;currently charging a 10% premium over their price, but there are unsubstantiated rumors that;they are contemplating a 10% price increase. We don?t know their cost structure, so we don?t;know whether their potential price increase is driven by cost increases or is merely a strategic;move on their part.;Historically, when we both charge the same price, our market share is about 65%. When we;charge a 10 percent premium over their price, our market share declines to about 60%. It;appears that in those instances where they have charged a 10% premium over our price, our;market share is about 70%.;Please provide a recommendation regarding whether we should maintain our current price or;reduce our price to $84.95. Please factor into your recommendation that we pay;programming fees to providers that amount to $32.50 for each subscriber. In addition;maintenance, service and billing costs are about $7.60 per subscriber. At present, there are;about 110,000 households in the relevant area.
Paper#18186 | Written in 18-Jul-2015Price : $27