Primer Inc. offers plumbing and air conditioning services to customers in Kumasi, Ghana. The company’s product strategy is to solve the customer’s problem irrespective of what it takes, at the time the customer needs it solved. The company provides same day service for customers, and the
aim is to make the customer happy before leaving.
The services of the company are available 24 hours a day, 7 days a week for customers. There is no extra charge for requests made on holidays, odd hours of the day, or in festive seasons. The company aims to be available at the call of customers without charging a pesewa extra, even at times when rival firms won’t get out of bed. The company fixes the price of the service before it begins, and customers can be assured of no extra charges. Irrespective of the customer’s location in the city, Primer Inc. does not charge additional fees for transportation. For all services, the company provides a one year guarantee on all parts and labour used, whiles rival firms provide only a 30-day guarantee. Management of the company believes that it is better to focus on customer satisfaction as the main
goal since the reputation of firms in the industry is not good. For Primer Inc, making profits is only a by-product of the quality of service they provide to customers. The company uses a rigorous hiring process, continuous training, a customer satisfaction themed compensation scheme, worker empowerment, and teamwork to implement this strategy.
Employees are aware and motivated that this is not a regular 8 hours’/day job, and each is prepared for working at odd times. Due to the nature of the service, the company charges a premium price that is well above the industry average. However, customers are willing to pay because the company provides good value for the price. Over 10 years, Primer Inc. has seen an increase in sales of about 1300%.
From the case, please answer the following questions.
1. From an operations management position, why is the company able to charge premium prices? Why are customers willing to pay the premium price?