Rita Would Retain All of Term Paper

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Comcast feels that the product life cycle is still in its infancy or introductory phase, and that costs will plummet once the technology improves, and more consumers use the product and make it integral to their lifestyle. Vontage like all of the companies has the advantage of the lack of federal communications regulations regarding the technology, but these laws may change in the future -- thus for all companies, the product is still in its growing phase, as branding, positioning, quality and also federal regulations are still an issue, but things are not competitive enough for companies to have a market-wide price war, as sometimes occurs during the growth phase of the product life cycle.

Question

Bundling is advantageous to a company, because it yields a captive consumer audience. A company can lure in a consumer with a low price, but once the consumer subscribes to the bundle, the company can hike rates in the future, and the consumer cannot price shop different elements of the service unless the consumer discontinues the bundle altogether. A consumer cannot eliminate elements of the bundle he or she no longer needs, but may stay with the company because of the difficulty of changing so many services. From the consumer's point-of-view, bundling is only advantageous if the consumer would want to use all of the services and can get them at a cheaper rate, while still receiving only one easy bill in the mail.

Question

Comcast's strategy seems like a wise move. It cannot offer its service at slashed prices without compromising quality of service, given the developing state of Internet telephony technology at the present.

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It does not want to start a price war at this early juncture of the product's life cycle. Time Warner has chosen to stress the quality niche market of the service at non-discount prices. Comcast can piggy-back off of the other companies' advertising for the service in the future. This will allow consumer desire and interest to heat up, and then Comcast offer slashed prices with the same amount of quality once the introductory phase of the product life cycle fully terminates, and the market enters the price-competitive growth phase. Also, many questions still remain as to how the U.S. government's regulations regarding the communication technology may change in the future, as it is only because of current laws that the companies are able to offer a flat rate, regardless of where and to whom the calls are made. Comcast can hedge its bets regarding how popular the technology becomes in the future......

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