Economic Analysis Essay Example | Topics and Well Written Essays - 500 words

Economic Analysis - Essay Example There is an elastic demand for the industry products and services. Perfect elastic demand means that the responsiveness of the consumers towards a price change is high than the price changed. With the reduction in call rates and message rates, Celcom will register an increase in the number of consumers using this service. The elasticity of demand in Celcom Company will increase the demand of the company products services and products as compared to the other services and products offered in the telecommunication industry. The introduction of a new telecommunication service provider known as the U-mobile in the country has increased the number of close substitutes when it comes to provision of telecommunication products and services. The availability of the close substitutes has led to a greater elasticity of demand (Armstrong and Kotler 2010). The elasticity of demand in the Malaysian telecommunication industry has led to the adoption of price penetration strategy. The products of Celcom are highly differentiated from those of its competitors. That is, its products are highly customized to meet the customer demands. As part of its product differentiation, Celcom has reduced the cost per message from 50 cents to 25 cents and the cost of a call from 35 cents to 20 cents per minute. This has been done to fully differentiate its services from those of its potential competitors. Celcom has also differentiated its broadband network in a way which keeps up with the current technology in Malaysia. The broadband network has been differentiated in a way which makes it the fastest network in Malaysia compared to the networks provided by its competitors (Armstrong and Kotler 2010). Its network has been updated with the current technological advancements. The company also intends on launching a new differentiated product from those of its competitors. The U-verse will allow customers to pay their bills using the phone, book online hotel