Question

1. What is the pricing strategy that Angie’s List used in late 2015? How does this pricing strategy differ from the market-specific pricing model Angie’s List used before that? What is at least one advantage and one disadvantage of the new pricing strategy compared to the previous one?

Answer 1

ANS

In late 2015 Angie's list introduced a new pricing strategy which was very different from the one which they used before and this change also led to the positive increase in their share value in the capital market .In new pricing strategy Angie's List introduced more effective tier pricing model in which they gave more benefits in the top level of the tier , They also introduced new services like carpenter and massusse. It also annoinced that it will drop the membership cost of freemium model and will also make free to browse and review costs .It enabled and ecouraged the new users to apply for top tier of the membership.Prior to this there was the price for the users for the review option and the benefits in the top model were not very efficient so consumers demanded more of lower tier of the membership.This eventually lead to fall in firms revenue and share value so they had to come up with a new pricing strategy model which was a change from two way pricing to one way pricing .One advantage was that it lead to an increase of top tier of membership customers in the company which gave a boost to the revenue of the firm and one disadvantage is that customers who were not able to pay for top level membership changed the plans to other competitors.