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Omnitel Case Study

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Submitted By Jawwad
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1. What was Omnitel’s advantage when the service was launched in 1995?
Omnitel offered a personalized customer service experience, the operator was polite (rather than saying “This is operator 54839,” Omnitel operators said something similar to “Hi, this is (NAME) from Omnitel, How can I help you today.” Secondly, the wait times were a lot less than TIM’s (up to 85% less). Finally, Omnitel had a very low churn rate of 10-15% a year. A market research conducted 6 months after Omnitel’s launch confirmed that Omnitel consumers were very happy with the customer service. 2. Why did the launch not perform to expectations?
Omnitel’s mission was to make the cellular phone personal and indispensable, much likes the wristwatch, and they failed to accommodate the symbolic status of a cell phone in the Italian market. Secondly, Omnitel had a monthly fee that costumers perceived as a tax for weather the use their phone or not, consumers wanted to be charged when the used the service. Finally, Omnitel was a new entrant, before Omnitel; TIM had a monopoly, although the awareness of cellular phones increased as Omnitel entered the market, so did the competition among the two companies. A Market survey conducted concluded that a large share of prospects were reluctant to change brands unless Omnitel introduced new plans. In May 1996, Omnitel only signed up 180,000 customers, although Omnitel’s customer service was seen favorably, market research concluded that customer service wasn’t as important as the high setup fees, monthly charges, and calling rates. Consumers wanted a plan where they would only pay for the service when they used it, and they were willing to pay a higher Rate / Min for it and buy non subsidized phones. Overall, Omnitel’s strategy of differentiae itself based on its customer service was not successful and led to unsuccessful performance. 3. What are

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