Diversification Strategies Case Study

Moser Baer’s Pricing Strategies: Competence-based and Value-driven?

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Abstract:
The case study primarily deals with the pricing strategy adopted by Moser Baer Entertainment Ltd., to attain its objective of delivering original and quality movie watching at a lower price in the Indian Home Video Market. Moser Baer Entertainment Ltd., is a 100% subsidiary of Moser Baer India Limited., world’s second-largest optical storage manufacturer. The case study highlights the pricing and marketing strategies adopted by Moser Baer Entertainment Ltd., to capture the potential home video segment which is threatened by rampant piracy. It details the company’s low cost structure and its market positioning strategies through its value pricing by altering the key components of its value chain and leveraging on its core competencies. It also discusses about the intense competition and price war prevailing in the home video market. Towards the end, the case poses the following questions for the class room discussion –

• Why did a storage device manufacturer enter the Home Video Industry?
• How did Moser Baer Entertainment Ltd., adopt pricing strategy to position itself?
• Will Moser Baer Entertainment Ltd., be able to capture the market for a longer time with reduced prices in the industry?

Pedagogical Objectives:

• Understanding how right pricing strategies for a product can help create a unique position for a company (pricing as a value proposition and therefore how does this become a new platform for positioning)
• To perform a cost structure analysis of Moser Baer Entertainment Ltd. and debate over the possible benefits of the company’s pricing strategy
• To discuss and debate over the challenges and the competitive threats that Moser Baer would have to address if it wants to sustain its unique position.

Keywords : Pricing , Pricing Strategies, Value Pricing, Price-Performance Gap, Value Proposition, Competitive Advantage, Cost Structure, Break-even point, Indian media and Entertainment Industry, SWOT Analysis, Diversification Strategies