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Popular products key to retaining customers

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Consumers likely to shift to another firm when popular product is discontinued. FILE PHOTO | NMG 

Telecommunications company Safaricom #ticker:SCOM last week discontinued its Sh99 for 1GB daily data bundle for a few of days before returning it after complaints from consumers online.

Meeting the needs of the consumers by reinstating such popular products is one way of retaining consumers.

Research shows that discontinuing favourite products leads to consumers switching to competitors instead of choosing an alternate product from the same brand.

At the same time, the leading mobile services provider also rolled out new data plans offering consumers 500MB + 500 SMS + Unlimited WhatsApp in which consumers will be able to use the online messaging application for free for the validity of the bundle purchased, for the same Sh99.

However, consumers on social media demanded that Safaricom reinstate the 1GB data bundle or they switch to its competitors, Airtel or Telkom offering daily 2GB data bundle for Sh99.

The telco is still the industry leader but is facing increasing competition. According to the latest industry report by the Communications Authority of Kenya, Safaricom’s mobile/ internet subscriptions market share declined from 72.8 per cent in the third quarter for the financial year 2017/2018 (January to March), to 68.4 per cent in the previous quarter.

While Airtel Kenya’s increased by four per cent to reach 23.1 per cent and Telkom Kenya decreased from 7.8 per cent to 7.6 per cent.

Therefore, Safaricom could avoid losing more consumers in choosing to reinstate the popular data bundle amidst the growing competition.

According to a 2002 case study on the consumer responses to discontinuance of favourite products, after a popular product was discontinued, consumers were more likely to select an alternative from a different brand than select another alternative within the same brand.

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The research, conducted by professor of Marketing, Melissa A. Martin of George Mason University in the US, studied 145 respondents asking them open-ended questions about a memorable discontinuance experience and their recollections were analysed for common trends and themes.

Some 43 per cent said they switched to an alternative product in a different brand while 34 per cent switched to another alternative product with the same brand and 23 per cent exited the category or switched between brands with no reported preference.

“Consumers who had switched to the discontinued product from another product in the same brand were more likely to select an alternative within the brand after discontinuance than to switch. Even among these subjects, though, 42 per cent either switched to another brand or cycled between brands frequently with no reported preference,” reported Martin.

Brands risk a decline in their market share and consumer appeal in choosing to discontinue a popular product that sets them apart from the competition.

However, brands that serve a niche market, discontinue products in order to still maintain their consumer appeal and brand value among competitors that offer cheaper products.

For instance, technology company, Apple last week, while launching its new smartphones for the year; iPhone XS, iPhone XS Max and iPhone XR announced that it was discontinuing older models; iPhone X, which was less than a year old in the market, iPhone 6 and iPhone SE.

In a January 2018 report by Ming-Chi Kuo, a then Apple supply chain analyst at KGI Securities, he noted that Apple will discontinue the iPhone X when it launches it new smartphones because just lowering the price will hurt the brand value of the other smartphones in the model line.

“Lowering iPhone X’s price after the 2H18 new models’ launch would be a negative to product brand value given that 3D sensing and OLED display are features of the new high-price model. Moreover selling the iPhone X at a lower price may have a negative impact on shipments of the new 6.1″ LCD iPhone in 2H18.

Therefore, it is expected that the iPhone X will reach end-of-life around the middle of 2018,” reported Ming-Chi Kuo.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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