In August, Reliance Jio, India's number one telco, introduced a new prepaid plan for consumers. Its cost was Rs 750, and the plan's speciality was that it came with 90 days of service validity. But now, Jio has changed that plan a little bit. The Rs 750 plan costs Rs 749 now. But that's not the only change. There's a small change in the benefit that this plan brings now. Let's take a look at what's changed.
What Does Jio Rs 749 Plan offer to Customers?
Reliance Jio's Rs 749 plan comes with 2GB of daily data, unlimited voice calls, 100 SMS/day, and Jio's suite of applications. The plan carries a total service validity of 90 days. The Rs 750 plan also used to offer all of this. But it offered one thing more. With the Rs 750 plan, users get 100MB of additional data for Rs 1. So the plan was already divided into two parts from Jio. The first part was Rs 749 plan, and the second was the Rs 1 plan which offered 100MB of data.
Now, Jio has just removed the Rs 1 plan from the equation. So there's the Rs 749 plan left with all of its benefits. It could attract many customers because it comes with 90 days of service validity. Jio has cleverly not introduced a 90 days plan with 1.5GB daily data. So if users have to opt for a 90 days plan, they would have to pay Rs 749 and get 2GB of daily data. It would help the company in driving the average revenue per user (ARPU) up in a very subtle manner.
The daily cost of using this plan is Rs 8.32 (Rs 749/90 days). Users get a total of 180GB of data with this plan. It can also be a great option for consumers going for the Rs 719 plan with the same benefits but for 84 days. Users wouldn't mind spending Rs 30 extra and bumping up to a 90 days plan. There's a term for a strategy like this - "Decoy Effect".
So Decoy Effect is basically pricing two things very close where the superior thing becomes a more sensible option for the consumers. For example, a company might price its small and medium meals too different; let's say the small meal costs Rs 80 while the medium costs Rs 170. However, the large meal here would be priced at Rs 190 for the decoy effect to become effective. So, customers would either want to go for the small meal or for the large meal because what's the harm in paying just Rs 20 extra to get the biggest meal than paying Rs 20 less to get the medium meal? The medium meal here is the decoy effect for pushing consumers to pay Rs 190 for the large meal and earn more.
