Case Analysis of Virgin Mobile

Virgin Mobile targets the 14 to 24-year-olds market. The case lays out three pricing options. Which option would you choose and why?

Virgin Atlantic is clearly the cash cow of the Virgin Empire but we have undertaken a

There are three options to price the new Virgin Mobile line in the US. The first option involves setting prices at the same level as the competition. The benefit of this option is the ease of implementation, but the drawback is the lack of differentiation. Virgin Mobile will not be setting itself apart from other companies, by

The key issue for Virgin Mobile USA is to select a pricing strategy that will both attract and retrain subscribers.

The generation of talking face-to-face is slowly fading away, and the technology era is going to keep on growing. One of the most widely used technology services known today is the cellular phone industry. According to the Pew Research Center’s website, 90% of American adults own a cell phone. Of that 90%, the smartphone ownership is at 64% (2013). Verizon Wireless, along with the other major carriers, T-Mobile, Sprint, and AT&T, have taken this data and comprised a growing industry where competition arises from all angles. These companies have battled one another on pricing, plans, and customer service for many years in order to stay on top. Unfortunately, these are major factors in whether or not a customer will choose the particular company over another.

“In my opinion, the Case would be improved by including the following summary” An American agriculture of the nineteenth century Cyrus McCormick, invented a company that produced farming equipment called McCormick Harvesting Machine Company. In 1902 his son Cyrus McCormick II merged the company with three competitors renaming it the International Harvester Company. By the late 1980’s the company had moved from producing farming equipment to manufacturing automotive products, trucks, and school buses. In the late 1980’s International Harvester company was renamed Navistar International Corporation. Over the years NIC changed and one of the most dramatic changes was the relationship with its longtime auditor Deloitte. (Knapp, 2015)

Virgin Mobile is looking to launch a new cell phone service in the US marketplace, which is already a highly saturated industry. This analysis will help select a pricing strategy that attracts and retains subscribers, while still maintaining a competitive edge within the industry. The cell phone industry has many sources of customer dissatisfaction. For instance, customers’ distrust in pricing plans due to confusing usage rates; companies’ inconvenient and inconsistent off-peak hours; service provider’s hidden fees that include taxes and higher rates after minutes are used up, universal service charges, and one-time costs; and binding contracts by the service

Microsoft is a multinational corporation of the United States; It specializes in developing, manufacturing, trading software licenses and supporting a wide range of computer related products and services.. In terms of revenue, Microsoft is the world's largest software maker. It is also called "one of the most valuable companies in the world".

Solution. Virgin Mobile USA needs to evaluate their suppliers of the mobile phones to ensure these devices are both physically appealing and have the capacity for the services that would be used

Being in the service sector it is important for Virgin Atlantic to study its marketing mix as it works as an efficient tool, while building up marketing plans. It comprises of the seven P’s which are as follows.

Springfield Express has experienced an increase in variable cost per passenger to $85 and an increase in total fixed cost to $ 3,600,000. The company has decided to raise the average fare to $ 205. If the tax rate is 30 percent, how many passengers per month are needed to generate an after-tax profit of $ 750,000?

engine. Unfortunately this source of cash didn’t last long. Recent statistics showed that in spite of an

The ABC system will help management analyse the profitability of each customer and restore the profitability of the company. Allied needs to offer benefits such as modified compensation plan focused on growing customer revenue and profitability to help encourage sales behaviour. TFC is able to significantly improve profits by concentrating on individual account management which SBP is capable of by identifying service costs and calculate the contribution for each account and then rank the accounts according to profitable ones. TFC should charge its customers based on their service usage by using cost plus pricing. The customers would be charged based on the cost of product plus service charge based on SBP systems plus a mark-up so that it will be fair to customers that have the same sales but different level of service.

Some Virgin businesses are also related in terms of being “ideally suited to e-commerce and in which growth is expected to occur – travel, financial services, publishing, music, entertainment” (Case, p.687). Virgin exploited this potential to create synergies by sharing activities across these businesses to reduce unit costs. i.e. the distribution of various products from different businesses can be shared by using “technology to give all Virgin customers a small mobile device form which they could purchase any Virgin product from a rail or cinema ticket to a CD… and streamline online service with a single Virgin web address: Virgin.com” (Case, p.687).

Vodafone also segment their market based on the lifetime value of their customers. Individuals who have a mobile phone on a contract payment plan are of higher value to Vodafone than an individual who is on a pay as you go payment plan. This is due to the fact that Vodafone are guaranteed a certain level of income from their customer for a period of 12 to 18 months. This can then help determinate the allowable spend per customer on marketing to help determine return on investment.