Marketing Strategy 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?

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

Additionally, the competition is likely to lead to erosion of margins and market share. Therefore, Virgin has to be sure that they can cope with the competition and take over some of the market share from the established banks.

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

With 6.6 billion connected mobile phones (against 4 billion toothbrushes) dragging in global profits of $1.5 trillion last year, the mobile phone business is growing at an implausible pace and does not seem to slow down. (Bingemann, 2016) Australian Communications and Media Authority are the two main regulators in regulating this industry. Mobile phone trend has grown rapidly fast in recent years, especially when big brands like Apple, Samsung brought out new product, telecom provider often bundle the data plans with the phone and sell to the customers. In Australia, there are three major telecom company, they are Telstra, Optus and Vodafone. Telstra has been a leader in this game since the very beginning and is continues to dominate the overall

Pricing for Virgin Mobile is focused on being the low cost provider of cell phone service. Pricing low will enable them to meet he demands of the younger consumers who have limited income streams.

Virgin Mobile, a MVNO is planning to launch its services in USA. It’s target is underserved Demographics of 15-29 years as this age group is underserved by the regular telecom operators due to their low credit score ( Under 18 demographic cannot go for contract). They are planning to launch their product with service offerings that focuses on value added services.

This provides Virgin Australia with a positive outlook of the future. The international sector of Virgin Australia during financial year 2015 was not so forgiving with a loss of $68.9 million. This was $22.8 million worse than the previous year. The domestic sector has improved greatly however the international sector has fallen into a loss larger than the previous year. Virgin Australia international improved by $2.4 million after making some minor changes to international business class. The operating cash flow of $218 million has improved by $226 million from previous year. Moreover, domestic unit revenue has improved by 3.5%, cost savings target for financial year 2017 has increased by $0.2 billion from financial year 2014. The closing cash balance of $1.03 billion signifies the improvement from financial year 2014. Yield has grown by 5.2% over the past financial year. The outlook statement, as quoted directly from the ASX Virgin Australia Financial year 2015 Results Presentation, states that “based on current market conditions, all fundamental business metrics are on track for the Group to return to profitability and report a Return on Invested Capital in line with its cost of capital for the 2016 financial year.” Virgin Australia is planning to improve their fleet and meet customer’s needs by improving their international network.

Virgin mobile is entering the US mobile market. Low brand recognition in USA and limited financial resources for advertisement represents a constraint because to enter successfully in such a market Virgin needs to swiftly attract its potential target customer, in order to establish a critical mass and financial strength to defend itself from incumbent and/or other potential entrants (price-wars, dumping, etc…). The profile of target customers, youth in between 15 and 29 years old with low credit credentials and high income / price elasticity (sensitivity to changes in price and income), is in conflict with the need to retain customers for a minimum period of 17

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

Virgin Mobile must decide on an optimal price offering for its service in the US that is going to be aimed at the 14-24 year old audience. The company plans to offer handsets for $30 at partner retailers, which will represent a loss of $30-$70 on the cost of the handset from Kyocera. The idea is that Virgin must make that money back with its rate plans. Also worth taking into consideration is that the company plans to make additional money from its consumers through its partnership with MTV, text messages, Virgin Xtras and other ancillary income. One of the company's fixed costs is the $60 million advertising budget.

1.4 Target Market: The main product offered by the Virgin Australia is air-travelling services from one destination to another to the customer. In regard, to Virgin Australia, an investigation demonstrates that the targeted customer of Virgin Australia incorporates business and corporate clients, The centre viewpoint to Virgin Australia that has contributed towards more elevated amount of development is the concentration of the carrier towards giving low cost aviation services. 1.5 Organisational

Virgin Media's products are predominantly intangible services. The company's product range includes landline telephone services, broadband internet, digital television, and mobile phone solutions. From the company's beginnings as two

Since Q1 of 2013, T-Mobile has set the telecommunications industry on fire by trailblazing with the the UN-Carrier strategy. The UN-Carrier strategy is essentially a set of changes to business approaches that have branded T-Mobile as the antithesis of the traditional cell phone carrier, such as Verizon, AT&T, and Sprint. Such changes to business practices include, no service contracts, upgrades whenever you want, and de-subsidizing phones from plans. The strategy has proven to be successful. In Q4 of 2014, T-Mobile took on 2.1 million new customers, overtaking AT&T which sat at 1.9 million new customers. Also, T-Mobile is officially the third largest carrier, overtaking Sprint for the title, with 56 million in total

The advances in mobile data technology now allow consumers to access information ubiquitously, providing the companies in the service sector with new marketing opportunities. Newer marketing technologies must be modelled and implemented to adapt to this environment [2]. The authors’ objective is to examine how user mobile Internet usage relates to certain unique characteristics of the mobile Internet space. As opposed to the limitations on geographical mobility and access faced by PCs, mobile devices can access data wirelessly almost anytime and anywhere. The South Korean 3G mobile market had over 10 million subscribers in June 2008 [2]. With such increases in