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Virgin Mobile Usa: Pricing for the Very First Time

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Submitted By baryalaisaleh
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Case Study:-Virgin Mobile USA: Pricing for the very first time

Introduction:
Virgin Mobile Company led by Branson, is a British-base company. Dan Schulman was chosen as CEO in 2001. He was trying to find a niche market in US for virgin mobile. US market was under-served and dissatisfy with existing Carriers. Youth were ignored and no carrier had capitalized on this segment. The company entered in a 50-50 joint venture with US-based Sprint in which Virgin will use Sprint network for US services. The goal of the US Virgin mobile was to have one million subscribers by 2002 and 3 million by year four. Virgin mobile was planning to adopt pre-paid system instead of contract. It was intended to serve those that are unable to have credit cards yet. Virgin mobile had to fight many shortcomings that were endemic in the industry. They preferred to introduce new features that will attract youth to use their services. Therefore, they were worried about pricing their services that should be attractive for the consumers, profitable for the company itself, and not rise the reaction of the rivals.

1. Do you agree with Virgin Mobiles target market selection? What are the risks associated with targeting this segment?
Indeed yes, the saturated nature of the wireless communication industry in U.S. made it very difficult for the new brands to enter the market. However the (15-29) market segment is yet remained untouched by the big players. If the youth segment remains the main focus for Virgin, the15-29 age group would be an attractive target market as yet it is underserved. Besides, Virgin’s low infrastructure costs setup is a strength for the company and its (Xtras) that consists special features such as Rescue Ring, text messaging, wake up calls and etcetera specially designed for the youths would generate additional usage and create customer loyalty. Therefore, by defining the…...

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