Base Camp Pricing Case Study Solution
Case summary
A web design company named as Signal 37 was initiated in 1999. Basecamp was launched in 1994 as a project management tool launched by Signal37. The company was re branded in 2014 as Base camp LLC. Moreover, all other products of the company were either sold or spun off to different entities. Base camp 3 was the first product of the company after its reorganization.
The company has always been profitable since its initiation. A minority stake of company was sold to amazon founder Jeff Bezos, in order to increase the customer’s growth. An article was posted by the owner, Fried, in which he mentioned that the company is not being greedy and working for only small companies. Moreover, it does not facilitate customization for some of the big companies who would generate higher revenue, but facilitating many small firms.
A press release and article was also posted by Fried in order to create brand awareness, introduction of free economics business model and the pricing methods and strategies used by the company. The article says that company wants to achieve a pricing structure that would capture more-customers value rather than working for only growth sake.
The company has been earning higher revenues since its inception. Moreover, still it was able to grow larger revenue terms without incurring extra costs such as hiring as it is a self-service business. In addition, the free and paid customers of the company were also increasing year by year, as it was estimated that there were 7000 accounts increasing weekly.
The trade of Base camp service is done through web interface which do not require any location or limited place. Moreover, it has been analyzed that this selling model has facilitated more customers that can be served by minimum salespersons. For the purpose of promotion and marketing, company has been availing facility of Google ,Ad Words and content marketing. Despite of these sources, word of mouth of respective customers have been helping in order to increase the company’s customer base.
The pricing of Basecamp has been varied from different schemes after its initiation. However, the current price schemes have been divided into their groups which contains “For Us” plan which has been priced at $29/month. Secondly, the “With Clients” plan have been priced at $79/month. Lastly, for the enterprises, the price has been set at $3000/month. Moreover, a free trial has been allowed to every customer. In addition, each pricing group has been facilitated with different services.
The company has always been profitable. However, to make further growth, company was thinking as if procedureis set correctly, moreover, if there would be need of changing prices. Therefore, different pricing testing methods have been conducted. In order to get satisfactory results, company conducted A/B pricing of increasing its process. However, it failed and results were not satisfactory. In addition, price sensitivity survey method has also been performed which also failed and resulted in prices of different services not being optimized. Lastly,it was identified that Basecamp customers are much diversified. Thus, it was suggested that different segments should be announced and different pricing strategies should be made for respective segments.
Base camp Success
Thu success of Base camp have been dependent upon its business model. As it was an early entrant in the project management software market. Moreover, the Base camp team used simple spreadsheet and email rather than difficult software in order to satisfy customers. Many competitors were using complex software’s that could be confusing to customers, slow up the speed and create problems for different customers. This acted as the company’s core competency and competitive advantage that helped it to achieve success since its inception.
The software of Base camp was just the collection of tools that would help the customers and their teams in order to collaborate and work accordingly. Moreover, it also identified the steps that could be used by groups of customers to increase their level of success. The projects which were targeted were not only web based but rather focused on every type of projects such as home project, school project, family projects and much more,in addition, the web page and mobile application of Base camp was also announced which would help them to remove email system as well as it would make communication easy. Moreover, the open API of its application would also help to integrate with other software.
Base camp Pricing Harvard Case Solution & Analysis
There was not any locality that was used by the company in order to make purchases or selling of software, rather it was done online and through web pages. There are many advantages of sales through internet, such as it saves the company’s cost of opening store or maintenance. Moreover, it would also attract customers and would be easy for them in order to make purchases. In addition, it would not be restricted to one place or limited area but can be sold on international basis. As this is an intangible item, it could not make sales through local stores.
The promotion and brand awareness has been created by many sources, company have always been using content management and Google Ad Words for making sales. However, it was not used as much. As the company’s owner is also a writer of many blogs, books and articles, much promotion has been done through these means. However, the best source of marketing has been considered the word of mouth of potential customers, which was the result of company’s efficient operations, have grown its customer bases................
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