Understanding Marketing as a Value-delivering Task 9

Mini Case 1.1 (contd)

enthusiasm for the subjects to their classroom. In quick time, Byju's became an easily
recognised and well talked-about brand.

Delivering the Offer

The smartphone as a learning device, the app as a medium and the Internet as the pathway
together gave the firm almost infinite reach in delivering the offer. The product would run on
smartphones with Android and iOS platforms, tabs and computers. The rapid expansion of
smartphones in the country has deepened the company's reach. The product now has a reach
of over 1,700 towns and cities.

Pricing the App: Offering Value to Customer and Capturing Value Back to the Firm
This was quite naturally a critical decision for the new product. The user is the school kid;
the payer is the parent. The child must be happy with the product; the parent must be happy
with price. The payment is not part of the child's school expenditure; it is an additional cost.
Although the app was mostly targeted at urban parents and children, the affordability factor
had to be kept in view. These were the arguments in favour of pegging the price low.
For the firm, the development cost of the app was high; it was employing high-quality-
content developers, teachers, tech people and studios. Even psychologists were on the rolls to
get the right clue to the children's psyche. The cost of upgrading the app, development of new
offers, administration of the online platform, all put together pointed towards a premium
price. Through trials, the firm found out that its app with so much of benefits and value
packed into it can fetch its rightful returns back. For example, the app is priced at an annual
fee of n3,000-~30,000 for classes 4-10 for maths and science. Classes 4-10 are the main
target group, and maths and science the main subjects handled. Two years of performance
proves that Byju's app is offering the due value to the customers and collecting due value back
to the firm's kitty. It already has 300,000 paid subscribers, and 1,000 new subscribers are
being added every day.

Value Does Not Imply Cheapness

The moment one mentions the term 'value', people are tempted to feel that the whole thing is
about something cheap, something with a low price. It is not so. Look at Byju's. A-class 4 child
is paying n3,000 to buy this app. It happens solely because the parent who pays is convinced
that for his child, this product is worth that price. He is getting his money's worth! And for the
firm, at this price, the product returns value to the firm's kitty. The firm is now confident that
at this price their investment is worth it! That was the sweet spot in pricing .
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Competition with Wide-ranging Price Offers

It is not as if the absence of competing offers facilitated such a pricing from Byju's. The oppo-
site was the case.
In fact, the non-profit Khan Academy is a mighty competitor; funded by Bill Gates
Foundation, Khan is offering absolutely free services with free YouTube videos. Khan is
already a global operator. So, Byju's stood at the other extreme, with a high price tag. Still
the product was welcome to the market. To quote the firm, 'We are our biggest competition
and the focus is to outplay ourselves every time with new innovations which make learning
more fun'.

Augmenting Value

To strengthen the tech capabilities, Byju's recently acquired Vidyartha, a career guidance and
academic profile builder, and TutorVista and Edurite from Pearson. To supplement the
online system, the firm started traditional classrooms also. The direct personal contacts with
the teachers gave a fillip to the whole programme. They commenced it in Delhi NCR,
Bengaluru and Chennai.