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Virgin

In: Miscellaneous

Submitted By dsouzamona25
Words 1557
Pages 7
Problem Statement
Virgin Mobile is launching its services in USA in the summer of 2002. It has to decide on its pricing strategy that would attract and retain subscribers.

Situation Analysis
Customer: The target consumer group is youth aged between 15 and 29 years. Penetration in this segment is significantly lower and the growth rate is projected to be robust in the coming years. Most of them have a history of poor credit quality, no credit cards and no facility to pass credit checks. The revenue generated is lower than the average acquisition and the cost of serving of the industry. Hence this group is largely under served.

This consumer segment has their specific needs that are not being met by the mobile service providers. Virgin Mobile is addressing these specific needs. Virgin Mobile is targeting value added services like Text Messaging, downloading information, ringtones, graphics, etc. These are more popular and considered trendier by these young adults. Virgin Mobile also plans to introduce more new value added services via ‘VirginXtras’. Virgin also will have more ‘easy to buy’ mechanism and communicate it to the target segment through more youth focused media channels such as MTV, WB and advertorials in The Complex, Vibe & XXL.

Company: Virgin Mobile, a venture of Virgin Group, was the 1st company to introduce a mobile service using Mobile Virtual Network Operator (MVNO) model. Virgin Image emphasizes on value for money, quality, innovation, fun & sense of competitive challenge. With its success story in UK, Virgin Mobile USA has partnered with ‘Sprint’ for network sharing. The main objective of the company is to establish in US market and reach a subscription base on 1 million in one year and 3 million in four years.

Competition: US mobile service industry comprises of 3 large companies (more than 20 million subscribers), viz. AT&T,

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