CaptiVoice Company Case
Pricing
Competitive Pricing Strategy
CaptiVoice Company can decide to use any of the pricing strategies that exist for its primary competitive strategies. The process of identifying the pricing strategy involves determining the approach that the company wants to use to conquer the market. It is important to understand that price is the main criterion that most consumers use to compare companies offering the same product or service. Therefore price contributes to the market position of a firm in great detail. Competitive pricing strategies take into account three approaches, which are pricing strategy to match competitor’s price, pricing strategy above competitor’s price, or pricing strategy below the competitor’s price (De Toni et al., 2017). Each of the pricing strategies has advantages and disadvantages, and it is upon the company to choose the pricing strategy that best suits its market position in the market. The first strategy CaptiVoice Company can choose for its pricing is developing a price that matches the price of its competitors. Most organizations use a pricing strategy that matches that of its competitors to put itself in the same market position as the competitors.
The pricing strategy is used by companies as an indicator or the baseline of the company. In a particular price category, improved services, quality production, creative, and innovative advertising are used as the ingredients of attracting customers. CaptiVoice Company should have an accurate definition of the competitor’s price and its overall operations and activities. The company must consider factors such as the economies of scale and the size of the competitors before choosing to match its prices with them (De Toni et al., 2017). This is because if CaptiVoice Company chooses a price that matches that of the competitors but has smaller economies of scale than the competitors, it will become unprofitable. Therefore to be realistic, the company has to consider if its size compares to that of the competitors in the industry.
An excellent understanding of the size of the competitors and their prices would be significant in helping the CaptiVoice Company management team to implement the perfect competitive pricing strategy for the company. The company can apply technology to actively monitor the fees, rates, and packages that would help in adjusting the prices accordingly. The second strategy CaptiVoice Company can take in competitive pricing is developing a price that is above all the competitors (De Toni et al., 2017). This type of strategy requires the company to proceed with caution because the objectives of the strategy must be deeply understood. If it is used together with the appropriate marketing mix and successfully implemented by the company’s management, it promises high-profit margins. The strategy cannot be applied alone to gain a competitive advantage over the competitors. It must be blended with non-price strategies of the marketing mix. For instance, CaptiVoice Company can implement such a strategy by blending it with a high-quality product than its competitors.
The company can add more advanced features to its software, making it more productive than those of its competitors. Simplicity is also key to the company because most uses want an app that they can navigate easily (De Toni et al., 2017). Considering that the CaptiVoice Company app has no native Android support and No writing support, it would be a good approach for the company to solve that weakness, improving the application quality, and have a good reason to price its product above the competitors. The application also has limited applicability because it focuses on young learners from kindergarten to grade 12. Although it has won the preference by many schools against its competitors, its competitors have their products and services being used in secondary and tertiary institutions. Considering CaptiVoice Company is currently able to compete with its competitors, increasing its services to all levers of education can earn it a better competitive advantage. Its improved product and services offered in all levels of education can be a precise strategy to raise the price without receiving objections from the consumers. Many schools are choosing Capti Voice over other products such as Kurzweil, which is difficult to use, giving the company to raise prices based on the increased demand (De Toni et al., 2017).
The value of a product matters to a customer no matter the price the product is being sold. Therefore high quality and increased features of Capti Voice can help the company increase its profits through pricing its product and services above the competitor’s price. The last competitive pricing strategy is pricing below the competitors. CaptiVoice Company can also choose to lower its prices below its competitors. The main goal of taking such an approach is to increase the number of sales by attracting customers due to lower prices and accumulating lower profit margins. Despite the fact that the price per unit is small, the company will be able to earn profit from a pool of small profits from increased customers (De Toni et al., 2017). However, the company must consider whether the market it targets is price sensitive or not. This is because pricing below the competitor is only applicable for markets with consumers that are price sensitive. It also requires that the company develops approaches that can help reduce costs and improve efficiency in its operations. However, pricing below the competitors can cause CaptiVoice Company to find itself in price wars. Slight misunderstanding of the competitors can lead to the company making a loss rather than profit if it lowers its prices.
Overreacting on the threats, the competitors are posing to the company can lead to the company losing. The three competitive pricing strategies can be applicable to the company, but pricing above the competitors is the best strategy. Pricing below the competitors is tricky because the threats of the competitors towards the company are not very big, and the target consumers do not price sensitive but rather quality sensitive (De Toni et al., 2017). Pricing to meet competition is also no the best option because the company is already outfitting its competitors in the industries. Statistics show that Capti Voice is becoming the most preferred by the school because it is easy to use and more improved. Therefore the company should continue to improve the features of its product and raise the price above its competitors, and it will experience increased profit margins.
Certification
Third-Party Certification to Improve Competition in African Market
Software certification offers a company greater confidence and certainty of its product. Certification helps to boost the acquisition and sales of the software company in the market. It can also help in certifying the legislative compliance and achievement of precise deliverables in outsourcing. Finding a third party in the African market to certify the CaptiVoice Company software can promise a good future for the company in the market. African learning institutions can be a great third party for the company to use in achieving certification in the market. The market is not saturated, and technology such as Capti Voice has not yet penetrated the African market well. Most of the learning institutions in Africa still rely on native learning methods (Sowunmi et al., 2016). It is only two companies that operate in the market, which are Eneza education and Read and Write. Read and Write is the only large competitor for CaptiVoice Company because Eneza education has limited functionality and uses primitive interactivity mode. T
herefore, the only main competitor for CaptiVoice Company in African learning institutions, is Read and Write, which has weaknesses that Capti Voice can help to solve. First, it relies on third-party tools which are not easy to install because it is expensive. Most of the countries in the African market are disadvantaged by the fact that they do not have enough resources to install Read and Write software in their learning institution. CaptiVoice Company can take advantage of partnering with African learning institutions as a third party by helping them install their software at a fair price (Sowunmi et al., 2016). The success of Capti Voice in improving learning in African schools, especially for the disabled in the schools, will help the company gain approval among the Africans. Consequently, more institutions in the African market will yearn to adopt the technology in their schools, fostering demand for the company product and services. Increased referrals by the learning institutions that will have consumed the service will help the company increase its market cap in the African markets. The company should, however, not forget about improving the product for easy functionality and maneuvers by the schools. The product should be simple and affordable to suit the less educated and less developed African markets (Sowunmi et al., 2016).
Yes, there are legal requirements and cultural necessities because the hardware and software design and packaging must meet the global environmental standards. The company will be required to comply with the laws and regulations that govern the packaging, branding, and labeling of products in Africa. Every country has its distinctive laws and regulations that govern how business is conducted in their market. Some cultures, especially in African, have not embraced technology, and most disabled people have no access to education. CaptiVoice Company can follow the right legal requirements and cultural necessity that will help the company penetrate the African market. The company’s packaging guidelines must meet have to meet heavy labeling, mental restrictions, and other packaging requirements to avoid a bad reputation in the African market. Manufacturing, packaging, optimization, composition, reuse, and recovery of the product must be considered (Wiegers, 2019).
The company should consider the following packaging principles. First, it should choose to use packaging materials that are environmentally friendly. Second, it should use contents that can be recycled as much as possible. Third, it should use packaging materials that minimize the weight to avoid a single package occupying too much space limiting the units transported. Finally, the labeling of the products must be clearly outlined to fit the requirements of the disadvantaged African market. A well-developed accessibility architecture is vital because most of the African schools are in remote areas where access to the internet is limited. Its services, if possible, can be made offline to help solve network problems among African society.
References
De Toni, D., Milan, G. S., Saciloto, E. B., & Larentis, F. (2017). Pricing strategies and levels and their impact on corporate profitability. Revista de Administração (São Paulo), 52(2), 120-133.
Sowunmi, O. Y., Misra, S., Fernandez-Sanz, L., Crawford, B., & Soto, R. (2016). An empirical evaluation of software quality assurance practices and challenges in a developing country: a comparison of Nigeria and Turkey. SpringerPlus, 5(1), 1921.
Wiegers, K. (2019). Building a Healthy Software Engineering Culture. Retrieved from https://medium.com/swlh/building-a-healthy-software-engineering-culture-59183b93389d