PeoplePC Case Study: Is There Really A Free Lunch?

PeoplePC Case Study: Is There Really A Free Lunch?

1a. What marketing objectives are PeoplePC and Free-PC pursuing?

PeoplePC's and Free-PC's marketing objectives include garnering as many customers as they can for their product and service package offerings.

1b. What pricing approach(es)are these companies using to reach their marketing objectives?

PeoplePC and Free-PC were reaching these objectives by utilizing a low cost leadership strategy. In the case of Free-PC, this had been taken to the extreme in that they were giving away their PCs for free. In fact, it could be argued that Free-PC was only using the PC users it had given computers too as a marketable commodity to ...

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cost structure?

PeoplePC's cost structure was highly variable dependent on the number of members it had in service and the number of new members that had signed up for service each month. This was an effective cost structure for this company, as costs would rise and fall with revenues, creating a more stable net profit percentage. If their costs were primarily fixed, when PeoplePC's membership faltered net profits would plummet.

2c. How can companies like PeoplePC make offers that appear to be free, or almost free?

Companies like PeoplePC can make offers that appear to be free or almost free only if there is a secondary revenue source that is not immediately apparent to most consumers. In the case of PeoplePC, their low initial costs are supplemented with added revenue from merchants. Free-PC utilized revenue from advertisers to offset their 'free' offer.

2d. What are the true costs to the consumer?

The true costs to consumers vary depending on the offer, ...

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as consumers do not have to shop for a separate ISP. The divisibility however was not there. A consumer could not simply try the service first; they had to sign up for a three-year contract. This may have be seen as PeoplePC's biggest hurdle. Lastly was the communicability of the product. Once consumers tried the PeoplePC computer and service, word of mouth advertising definitely helped the product take off.

4a. What are the core, actual, and augmented products being sold by PeoplePC? Clearly differentiate between the three.

The original core product PeoplePC was offering was the computer. The actual product they were offering was a computer, with Internet service. ...

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PeoplePC Case Study: Is There Really A Free Lunch?. (2016, September 18). Retrieved March 18, 2019, from
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"PeoplePC Case Study: Is There Really A Free Lunch?." September 18, 2016. Accessed March 18, 2019.
"PeoplePC Case Study: Is There Really A Free Lunch?." September 18, 2016. Accessed March 18, 2019.
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Added: 9/18/2016 04:28:17 AM
Category: Business
Type: Premium Paper
Words: 1339
Pages: 5

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