Essay Answers

Virgin

-- The cellular industry is notorious for high customer dissatisfaction. What is the source of all this dissatisfaction? How have the various pricing variables affected the consumer experience? Why haven't the big carriers responded more aggressively to this customer dissatisfaction?The

The source of all the dissatisfaction stems from many different things. Most consumers do not trust the industry pricing plans. Companies advertise, “free this” or “free that”, but young people know that there are many different hidden charges, and they resent this. Consumers these days are savvy, and they hate feeling like they are being used. Other factors include contracts, pricing, buckets, hidden fees, and off peak hours. Over 90% of all subscribers in the U.S. have contractual agreements with their cellular providers. The contracts are generally for a period of one to two years, and require rigorous credit checks. This is very unsettling for many consumers. People don’t like being “tied down” to a cellular provider or the strenuous credit check.

Hidden prices play another factor in this dissatisfaction. These include taxes, universal service charges, and many one time costs. Many plans also have established “buckets” of minutes. Customers then sign-up for a bucket of minutes. However, if the customer exceeds their allotted bucket of minutes they are penalized with extremely high rates. On and off peak hours are also concerns. Originally, off-peak hours began at 6:00pm, and then it gradually changed to 9:00pm. All of these various pricing strategies have led to the dissatisfaction of the consumer’s experience. These pricing strategies have also excluded a demographic that is projected to be very robust for the next five years; the consumers aged 15 to 29. With the rigorous credit checks needed to attain a cell phone this huge demographic does not qualify. Many younger consumers either have no credit or bad credit. Another stipulation to obtain a call phone is that...