Solution to assignment #2_ case study 2-Snapdeal Part 2
The shortcomings in the business model is as follows:
a) Touch & feel problem: The company has initially started providing free coupon in physical form and then changed it to SMS format, which is a digital format. Many of the customers were not ready with this kind of chnages and were not comfortable with receiving the coupons in digital format. Also, there was a chance of getting the SMS deleted from the phone, which may deprive them from using the coupons. So the company should have not scrapped out physical coupon totally, but should have offered both types of coupons and could have gradually diminish the physical coupon based on the customer acceptance.
b) Variable cost- A Freemium service means free+premium, that means some services will be free while some of the others will be on premium basis in case the customer requires some kind of value addition. Snapdeal has not charged anything even for the premium services. Because of which variable cost always kept on increasing, while it is always supposed to be nil. The company should have offered some value added services with premium pricing and thus should have check the customer base, who are ready to avail the paid coupons or services. In this way, they could have judged the type of customers, and could have effectively diversify its product based on the customer type.
c) No value addition- The company named the model as freemium one, but failed to provide any kind of value addition to its service, which ultimately generalised the model, and people could not relate with the same. If it would have bifurcated the same, the Company may have found itself with some premium customers eager to use the value addes services. Snapdeal then accordingly could have marketed its products.
d) Not user friendly- Customer had to show the sms received from the Company to the vendor to avail the benefit. But in case of online coupon the benefits can be availed at that point of time only without showing it to the vendor personally. Thus this whole process of SMS coupons were a cumbersome job for a customer. What Company could have done is that they could have allowed the option of forwarding the SMS to the vendor instead of going physically to them, and the vendors could have made the databse of the customers. In that way, when the customer was receiving the SMS, the vendor should also receive the SMS informing that this particular customer is eligible for some discount. At the time of bill payment, the customer could have been identified with their mobile no and the benefit should have been provided to him without showing any such kind of SMS.
These are the shortcomings and suggestions of improvement from my point of view.