Problem Statement Virgin Mobil is venturing into the US market and their launch date is July 2002. The company’s goal is to have one million total subscribers by the end of the first year and three million by year four. In order to achieve their goals‚ the company has to come up with a competitive pricing strategy to attract and retain customers in an already mature market. Recommended course of action Despite a mature US market‚ the cellular service industry has a market penetration of only
Premium Virgin Group Mathematics Pricing
Virgin mobile pricing Document Transcript VIRGIN MOBILE USA – ‘FIRST PRICE’ STRATEGY (An analysis of the Pricing Decision alternatives that Virgin has to undertake to create an alternate customer segment and monetize their buying power)VIRGIN XTRAS – OVERVIEWThe Virgin Mobile USA service involved content‚ features and entertainment‚ called “Virgin Xtras”.Collaboration with MTV networks as it was the most recognized youth brands in the country and unparalleled reach forthe under-30 market segment:
Premium Price Costs Variable cost
1 AEM 4160: STRATEGIC PRICING PROF.: JURA LIAUKONYTE VIRGIN CELL CASE: EXCERCISES Pricing Structure from the Carrier Perspective ¨ Contracts: ¤ ¤ ¤ Annual churn rate WITH contracts Annual churn rate WITHOUT contracts The difference: =2% * 12 months = 24% (p.8) =6% * 12 months = 72% (p.8) 72% - 24% = 48% Take AT&T example: customer base = 20.5 million If AT&T abandons the contract based plan how many new customers would it need to acquire to offset customers from an
Premium Price Costs
on extra usage users penalized heavily 4. Charged less for off-peak than on-peak minutes‚ but the off-peak period had shrunk 5. An additional fee was added to monthly bill‚ including taxes and services charges. From Company’s Standpoint Virgin Mobile USA had to fix all these problems prevalent in the industry while taking a pricing decision. The main limitation it faced was that the prices should be competitive and portable without triggering of competitive reactions. There are three options
Premium Costs Cost
analyze the best possible pricing strategy for the Virgin Mobile venture into the United States. 1.2 Situation Virgin is a global company that has 200 corporate entities involved in everything from planes and trains to beverages and cosmetics. The newest addition is the Virgin Mobile USA entity‚ which was created after Virgin was able to successfully penetrate the U.K. cellular market. However‚ the company was not so successful with the mobile services in other parts of the world. The company has
Premium Mobile phone Virgin Group Mobile network operator
Virgin Mobile Paper A Case Study Analysis Presented to: 1 I. CASE SUMMARY Virgin‚ a U.K. based company led by Sir Richard Branson‚ has had a history of brand extension resulting to 200 different corporate entities. One of which is Virgin Mobile which has decided to expand to USA based on their success in the U.K. market. Dan Schulman‚ Virgin Mobile USA CEO‚ is tasked to lead the expansion to the U.S. and has decided to focus on consumers aged 15-29 given that there is low penetration
Premium Virgin Group Richard Branson Pricing
1. Given Virgin Mobile’s target market (14 to 24-year-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.). I believe Virgin Mobile has two options. The first option is the obvious for their target market and any new
Premium Pricing Mobile phone Marketing
There is nothing that will prevent Virgin from competing to an untapped market. Threat of Substitutes Weak o There are very few substitutes available that offer mobile and immediate communication. Alternative like pagers are outdated & this target market cannot afford sophisticated PDA service. Degree of Rivalry Strong o Competitors have brand recognition in the US and have the majority of the market share. Financial Analysis: Initially‚ Virgin may have no great profits since
Premium Mobile phone Marketing
Netherlands. The significant contributions of Jan Peter van der Hoek‚ Ewald Bruggeman‚ and Erwin van den Broek in gathering and analyzing case information are gratefully acknowledged. Please note that we prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. We have disguised some case information. Send correspondence to: James A. Narus Babcock Graduate School of Management Wake Forest University Suite 150‚ One
Premium Paper
potential competition which may offer a much better deal. Virgin Mobile became aware of this cellular anarchy and had to decide what pricing strategy would best attract their target niche and offer them unbeatable value so that competitors could not enter into the same market easily. Alternative 1 -Clone the Industry Prices The first pricing strategy Virgin mobile considered was to copy the current industry pricing structure. The angle was that Virgin was to offer the same prices that of their competitors
Premium Mobile phone Competition Cellular network