A New Prepaid Pricing Plan to Capture the Youth Market
Entering into a highly saturated cellular phone industry, Virgin Mobile has decided to target the youth market. This market was underserved by existing carriers because they didn’t make money from those young consumers. Therefore, Virgin Mobile should develop a competitive and profitable pricing strategy for the new cellular phone service. This memo is intended to propose a new prepaid pricing plan to create market share and profit.
1. A radical and appealing pricing plan for the young consumers:
• No contract, no hidden fees, and no difference between off-peak and peak hours. • Pay-as-you-go plan: $99.99 starter pack (400 minutes in 30 days with a free basic handset). • Lower handset subsidies to reduce acquisition cost
No contract, no hidden fees, and no difference between off-peak and peak hours.
What you see is what you get! Eliminating contracts and any hidden costs, Virgin Mobile makes customer communication simple, unique and trendy. Breaking all barriers would attract more target customers. The young consumers aged 15 to 29 have poor credit quality. According to the survey, 30% of prospective customers failed to pass the rigorous credit checks. As a result, no contract and no credit check would cater to this group. It also helps retain customers. Many customers abandoned their carriers because of confusion and hidden charges. By eliminating all hidden fees, Virgin Mobile would build a trustworthy customer relationship and maximize customer satisfaction and loyalty. Accordingly, the estimated 6% of churn rate may be reduced.
Pay-as-you-go plan
It is an attractive deal to the young consumers with poor credit checks. The $99.99 starter pack includes 400 minutes and a free handset. To add minutes, customers can purchase $20 refill card for 200 minutes or $ 35 refill card for 400 minutes. Prepaid plan makes purchasing easy and convenient. Customers can buy this pack in Target, Sam Goody music stores, and Best Buy.
1. A radical and appealing pricing plan for the young consumers:
• No contract, no hidden fees, and no difference between off-peak and peak hours. • Pay-as-you-go plan: $99.99 starter pack (400 minutes in 30 days with a free basic handset). • Lower handset subsidies to reduce acquisition cost
No contract, no hidden fees, and no difference between off-peak and peak hours.
What you see is what you get! Eliminating contracts and any hidden costs, Virgin Mobile makes customer communication simple, unique and trendy. Breaking all barriers would attract more target customers. The young consumers aged 15 to 29 have poor credit quality. According to the survey, 30% of prospective customers failed to pass the rigorous credit checks. As a result, no contract and no credit check would cater to this group. It also helps retain customers. Many customers abandoned their carriers because of confusion and hidden charges. By eliminating all hidden fees, Virgin Mobile would build a trustworthy customer relationship and maximize customer satisfaction and loyalty. Accordingly, the estimated 6% of churn rate may be reduced.
Pay-as-you-go plan
It is an attractive deal to the young consumers with poor credit checks. The $99.99 starter pack includes 400 minutes and a free handset. To add minutes, customers can purchase $20 refill card for 200 minutes or $ 35 refill card for 400 minutes. Prepaid plan makes purchasing easy and convenient. Customers can buy this pack in Target, Sam Goody music stores, and Best Buy.