The industry low pricing can create an image that the phones do not have as high quality. The first option is not sufficiently different from the rest of the market. The price positioning is same and only get better off peak hours, supposedly “fewer hidden fees” and applications. Virgin Xtras is a creative idea and definitely suits Virgin’s image and targeted young audience, however I don’t think it is a sustainable selling argument. It is the icing on the cake and gives no additional meaning to the customer. The second option looks like a good alternative because money is always a powerful argument and most customers seem to feel like they are paying too much particularly, when focusing on a target audience that has a small budget. Focusing on the 100 to 300 minute audience is also well adapted to our target audience’s need. Keeping the “buckets” of minute is also a good thing because we do not take the risk to confuse people with something. But to what extent the company will gain is the issue with this strategy.
The third option of creating “A Whole New Plan” is afresh and coming up a different pricing structure that is different from everything out on the market. This is the most radical and risky of the three options, but if executed correctly can be profitable and the right choice. Not to have contracts is huge, but when considering the target market, it fits. It would guarantee the younger teens to be able to purchase. Under 18 market wouldn’t be able to sign the contracts. Another fault with the target market is bad credit. The target customers would be a mixture of those that wouldn’t be credit approved at Virgin Mobile’s competitors. Prepaid vs. post-paid minutes is another important variable. It also goes along with the group of consumers who do not have good credit. This group of consumers tends to purchase prepaid plans since they don’t require