Prior to 1995, why was America online (AOL) so successful in the comme
The reasons for the success of AOL were manifold. Not only was it a pioneer inretain and capture customers. The following are a few reasons for the 4 million
1. AOL found ways to coordinate its pricing and compete on nonprice dimensions,2. It also had the first mover advantage.AOL followed the differentiation strategy.
This strategy gave AOL added benefits in becoming the market leader prior to 1Supply a unique product or service at a cost that was easy to understaSuperior product variety : AOL offered a lot of added services to the cuSuperior customer serviceInvestment in brand imageAmerican online was a leader in the development of new mass medium that enc
1. Online services2. Internet3. Multimedia and other interactive tecnologies
AOL generated revenues from the following means:
1. Consumers : Through membership fees and usage per month2. Content Providers3. Merchandisers : Through advertising, commissions on merchandise sales and4. Other Businesses: Through sale of network and production services.
AOL pursued continuous investment in the following to position itself as a leade
1. Growth of its existing online service and related businesses.2. Ability to provide a full range of interactive services.3. Technological flexibility.
The strategies that AOL followed were:
1. AOL’s rate structure was the easiest for the customers to understand and antiin an environment when the other service providers had complex rate structure2. AOL invested in specialized retention programs including regularly scheduledand new features and the addition of new content, services and software progra3. AOL ventured into various Direct Marketing and Co-Marketing efforts to attracsoftware with their computer products, facilitating easy trial use by the custome4. AOL had entered into a number of joint ventures. They made sure that the nethe entrepreneurs 20% of the revenue but in return demanded exclusive contra Thus the content available on AOL was not available anywhere else. This attract
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