Good, Better, Best (GBB) Model - Case Study Review
Updated: Jun 21, 2020
1. Per the readings, particularly on pages 106 through 110, please provide an example of a multinational company (not already listed in this article) that offers 3 product tiers along a Good-Better-Best (“G-B-B”) continuum and a one sentence description of each tier.
A multinational company that offers 3 product tiers with a G-B-B model is Spotify. When looking at Spotify from a college student’s perspective, the three service tiers include: Standard Premium (Good), Premium Family (Better), and Premium Student (Best).
The standard premium account costs $9.99 per month with no eligibility to bundle other programs. Premium family starts at $14.99 per two family members, $19.99 for three, $24.99 for four, and $29.99 for five users. Finally, the best option for college students would be the premium student account. It is only $4.99 per month and is bundled with HULU and Showtime (no additional cost for the full bundle).
2. Insofar as ‘capitalizing’ on G-B-B, the author lays out 3 potential aspects of such a pricing strategy: Offensive, Defensive and one based on the Consumer Psychology of your target market(s). Use the same company from your answer to question #1 to provide a short description of how it carries out those 3 aspects. Each aspect should be described in no more than 2 sentences.
Spotify combines the defensive approach with a strategy based on consumer psychology of their target market. They do not focus on an offensive strategy; an example of how Spotify does not use an offensive strategy is that their pricing is the same as competitors such as Apple Music and Pandora. As for Spotify’s premium family account, it is more expensive than Apple Music, so being a lower-priced competitor to beat competition is not their intention. What is their intention is that they want to offer a quality product at a decent price (defensive). As for catering to the consumer psychology of their target, they layout the three different tiers very nicely on their website, so users can clearly see how Spotify differentiates from competitors. The bundles are not complex, and features of each tier are specific and understandable. The bundle for the student discount also caters to college students’ interests, which makes that tier more appealing.
3. Per the author’s discussion of defining and pricing bundles as featured on page 112, please use the same company you’ve identified above to make one (1) recommendation (as if you were a newly subcontracted Marketing Specialist) of a “Fence attribute” or feature that would bolster their “BEST” product bundle or level. Note that the feature you put forth should contain a high appeal-low cost element that the author illustrates herein.
Spotify targets many groups but the segment this paper is focusing on is college students. With this target being identified, the Best option is the premium student account. Currently, the premium student account offers Spotify for $4.99 per month with HULU and Showtime included at no extra cost. To make this Best offer even greater with a high appeal-low cost addition, Spotify can partner with the New York Times and include a basic subscription.
Spotify, HULU, Showtime, and the New York Times all fall under different service categories and could be appealing to college students. Currently The New York Times has a very cheap student subscription ($1 per week = $4 per month) and students can cancel at any time.
Seeing how The New York Times is currently implementing their subscription, they would not lose much money if they added it to the Spotify premium student bundle since they currently are not charging students a high price nor a set subscription time frame. As for Spotify, they would give a part of their profit to The New York Times similar to what they have been with HULU and Showtime, so it’s not a big change for Spotify but rather an addition to what they are already doing with other services.