This website uses cookies to ensure you have the best experience. Learn more

Virgin Mobile Essay

1744 words - 7 pages

Virgin Mobile USA : Pricing for the Very First Time

1) Virgin Mobile targets the 14 to 24-year olds market. The case lays out three pricing options.
Which option woul you choose and why ?
All three options are very interesting for Virgin Mobile to introduce the American market. Considering Virgin Mobile’s background, goals and strategy, I would have choose the option 3 « A Whole New Plan » There are few reasons that explain this choice : Firstly, Virgin Mobile’s cultural values are to be innovative, fun. It also wants to make things different from its competitors and continuously improve customers’ experience through innovation. ...view middle of the document...

It would be difficult to make the difference with only $60 million on advertising budget when competitors have around $650 millions of advertising budget.

- Option 2 “Price below the Competition”: This possibility could enable Virgin Mobile to quickly gain market share. However this is not without risks. Firstly it could create a strong reaction from competitor and create a price war. According to the case, a price war could have a very negative impact on Sprint or its competitors. Indeed, there is no benefit for both, customers and supplier from a price war in western countries especially when the market arrived to maturity, which is the case for the US mobile.
Secondly, with low prices, customers could see Virgin Mobile as a low quality service provider. Moreover, the third option will fit the best with the young people, and could also attract customers that are annoyed of hidden fees from others major carriers.

Plan: Before the realization of a pricing plan, it is important here to set “boundaries”. In fact there are few things to respect regarding subsidies, acquisition cost, and so on in order to launch prepaid pack successfully. Firstly, industry analysts highlight that the acquisition cost will have to be equal or below $100. Secondly, try to lowered cost per minute, which actually cost from 35 to 75 cents. Thirdly, the subsidies will have to be managed. Fourth, we have to remember that there is fixed cost such as advertising ($60 million) and commission to the distributors per sale which has been negotiated at $30. Finally, consider that the target market is the teenager, they use their cell--‐-phone in a completely opposite way than a businessman. Also in order to facilitated the purchased of minutes, customers could buy recharges on Internet, or at the supermarket.
Prices of the prepaid recharges:
100 minutes = $20
200 minutes = $35
300 minutes = $45

Regarding the subsidies, as Virgin signs a contract with the brand Kyocera, in order to have cheap mobile, it has been decided to delete those subsidies. As off peak hour do not fit with the target market. Today teenagers are sending a lot more messages than businessman. It would be more advantageous for them to have free text. This option will be available only between Virgin Mobile’s pre--‐-paid. ...

Other Papers Like Virgin Mobile

Virgin Case Essay

3215 words - 13 pages Virgin Mobile 1. Given Virgin Mobile’s target market (14 to 24-yeard-olds, how should it structure its pricing? The case lays out three pricing options. Which option would you choose and why? In designing your pricing plan, be as specific as possible with respect to the various elements under considerations (e.g. contracts, the size of the subsidies, hidden fees, average per-minute charges, etc.) 2. How confident are you that the plan

Virgin Group Essay

696 words - 3 pages activities up to the present for the specific venture respectively. For example: Virgin Digital UK offers digital music to a wide variety of customers in the mediums that are compatible with wide range of software and digital hardware. The company has deep roots in music industry begins with its record company Virgin Records. The company has benefited by the ownership and right to many music tracks and make available to the public. Virgin mobile can

Virgin Blue

1806 words - 8 pages up. At the same time, innovative programs such as Accelerate for small business, the Redundancy Refund and Twitter fares communicate a sense of flexibility and freshness (Virgin Blue, 2010). Resources should be provided to further develop new offerings such as free entry to the Lounge for Velocity members, the development of Virgin Blue iPhone applications and integrated promotions with Virgin Mobile and the launch of Virgin Money products in Australia. Page 120


3071 words - 13 pages regions such as Asia, Europe, North America, Africa and Australia. Virgin group has expanded into various industries such as leisure, travel, tourism, mobile, broadband, T.V, radio, music festivals, finance and health and through Virgin green fund it has now invested in renewable energy and resource efficiency. 2.3) External environment The outside factors which affects the sustainability of the environment is termed as the external environment

Virgin Atlantic Airways (VS) 1984-1999

4556 words - 19 pages same young, mobile, relatively affluent people who had been buying records by Virgin artists in Virgin record stores for years. Latterly, they would have been reading Virgin books, watching Virgin videos and Virgin films. Virgin had long ago cased to be simply in the music business; it was now in that most Eighties of concepts, the lifestyle business.By the end of two weeks, Branson had the following locked firmly in his mind: the airline would


3265 words - 14 pages an organization that has acquired a division from him, for example, Virgin Mobile USA, Virgin Mobile Australia, Virgin Radio and Virgin Music (now some portion of EMI). ECONOMICAL The brand name "Virgin" emerged when Branson and an accomplice were beginning their first business, a record shop. They viewed themselves as virgins in business. The present Virgin logo was initially outlined on a paper napkin and remains to a great extent

Business and Finance Unit 3 P1

1595 words - 7 pages related and some for dry skin etc. NHS do not do this as they are restricted to just Britain since there taxes are taken for the free health service straight away. However they could open up walk in centres which would bring in a new market for the NHS Virgin have used product development as they have made aims to bring new products to old customers such as Virgin media, Virgin mobile, Virgin music and travel. All these products/services must

Direct & Digital Marketing Strategy at Virgin Atlantic

2681 words - 11 pages service, to have no smoking flights, to have drive-thru check-in, to have an arrivals lounge, to allow mobile connectivity and SMS texting on board, the first to have at-seat podcasting and, most recently, the first to fly one of its planes using biofuels” ( PROFILE: VIRGIN ATLANTIC 2007). Micro environment analysis Customer behavior analysis Who are Virgin Atlantic´s customers? Virgin Atlantic attracts customers who


2550 words - 11 pages Telekom, a German Telecommunication giant (Mansfield, 2011). The company currently provides services to regions in the United States along with the U.S. Virgin Islands and Puerto Rico. T-Mobile currently owns more than 33.73 million consumers in the telecommunication sector and has yearly revenue of US$21.35 billion (Rahn & Moritz, 2011). Identification of the Issues Current marketing strategies must be analysed, before any

3g Digital Networks

1017 words - 5 pages standard was originally designed by Qualcomm in the U.S. and is primarily used in the U.S. and portions of Asia by other carriers. Sprint, Virgin Mobile and Verizon Wireless use CDMA while T-Mobile and AT&T use GSM. While CDMA and GSM compete head on in terms of higher bandwidth speed, GSM has more complete global coverage due to roaming and international roaming contracts. Citations CDMA2000 GSM Comparison. (n.d.).Scribd. Retrieved February

Creating Value in Marketing

2011 words - 9 pages "marketing matches the product to the right customers that have a need for it. This is the real value of marketing because, advertising must always be an investment, never an expense. It must produce more revenue than it costs." In order to understand how companies create value for consumers, Virgin Media serves as a suitable example. Virgin Media formed in 2006 by the merger of NTL, Telewest and Virgin Mobile UK, came to be the first 'Quadruple

Related Essays

Virgin Mobile Essay

873 words - 4 pages Case Study - Virgin Mobile USA PGXPM 10 – ARJUNAS – GROUP VI SERVICE MARKETING Assigned by Prof. D. Sriram MEMBERS: NIRANJAN DAUTKHANI Virgin Group Profile: * Virgin, a leading branded venture capital organization, is one of the world's most recognized and respected brands. * Conceived in 1970 by Sir Richard Branson, the Virgin Group has gone on to grow very successful

Virgin Mobile Pricing Strategy Essay

1401 words - 6 pages Virgin Mobile USA Pricing Strategy1.) Given Virgin Mobile's target market (14 - 24-year-olds), how should it structure its pricing? The case lays out three pricing options. Which options would you choose and why? Be as specific as possible with respect to the various elements under considerations (e.g., contracts, the size of the subsidies, hidden fees, average per-minute charges, etc.)Given Virgin Mobile's (VM) target market (14 - 24-year olds

Virgin Mobile Market Entry Strategy Essay

2040 words - 9 pages 2008 VIRGIN MOBILE-THINK HAT KE MARKETING PROJECT PREPARED BY:9/12/2008 September VIRGIN MOBILE-THINK HAT KE 12, 2008 Why Virgin Mobile In Indian mobile market, Virgin mobile is a unique player based on its business model and strategy. It is the only service provider which does not hold any bandwidth and mobile setup infrastructure but uses Tata Teleservices spectrum and is penetrating market totally on its branding and marketing

Virgin Case Essay

2120 words - 9 pages outlay of only £15m, whilst its partner, AMP, ploughed £450m into the joint venture. Virgin Group's move into clothing and cosmetics required an initial outlay of only £1,000, whilst its equal partner, Victory Corporation, invested £20m. With Virgin Mobile, Virgin built a business in the wireless industry by forming partnerships with existing operators to sell mobile services under the Virgin brand name. The carriers' competences lay in network