Virgin Mobile USA: Pricing for the Very First Time Case Study
Synopsis:
The CEO of Virgin Mobile USA, Dan Schulam, is faced with the challenge to successfully enter Virgin Mobile into an already saturated cellular market. Mr. Schulam needs to identify a niche in the cellular marketplace and devise a pricing strategy to attract their target segment, consumers between 14 and 24. Schulam must choose one of three pricing strategies to implement that will best allow Virgin Mobile to differentiate itself from competitors and attracts consumers in their teens and twenties to buy from Virgin.
1. The most viable option is the one in which Virgin Mobile adopts a similar pricing structure, but with actual prices below the major carriers. Virgin is attempting to enter into a very saturated and competitive market so it needs a way to attract its target customer. The target age group of 14-24 years old is one with elastic demand towards mobile devices and is sensitive to price. By offering a price below the industry average, Virgin will be able to increase the demand of their devices. In order to maintain stability, I believe Virgin Mobile will be better off utilizing 2-year contracts as opposed to no contracts at all. Even though not offering contracts has the potential to win over a lot of customers, the 72% yearly churn rate without contracts is a huge risk to take for Virgin. The young demographic Virgin is targeting tends to shop around for the best deal so by utilizing contracts Virgin can ensure a stable customer base that won’t switch to a competitor provided that another carrier suddenly begins to offer an even cheaper plan. Virgin Mobile offering a price per minute below the industry average for their key bucket of 100-300 minutes per month will enable them to provide customers with the best price available.
2. Combining a price below the industry average with demographic specific applications such as VirginXtras, Virgin Mobile will receive an influx of customers. The breakdown analysis of 17 months
LEADERSHIP & ORGANISATIONS COURSEWORK ASSIGNMENT TUTORIAL Leadership & Organisations 6BUS1001 – 0901 Semester A (2012-13) Case Study: ‘Virgin Atlantic and Ryanair’ Question: Using relevant leadership, management and motivation theory, compare and contrast the leadership styles of Richard Branson and Michael O’Leary. Critically discuss the state of affairs in the two organisations that are created or impacted by their leadership styles and behavior. Word Count: 1700 Your…
THE VIRGIN GROUP PROBLEM: * The Virgin Group is so unrelated diversified that it has been criticized by some commentators because it has become an "endorsement brand that could not always offer real expertise to the businesses which it is associated". So the real question is "Can The Virgin Group be good/successful in every business it gets into?" "Are they really adding a real value to each business/customer? * What will happen if a customer has a bad experience with any of the product…
Executive Summary This report analyses Virgin Australia (ASX code VAH) and identifies its potential business and audit risks that will need to be addressed in the 2014 audit. It is presented to the Virgin Australia Audit Committee as part of the 2014 Audit planning process. The first part of this report provides a broad introduction into the business of Virgin Australian by examining its principal sources of revenue, its nature of operating, its competitors, the market share and the regulations…
Virgin Blue Cabin Crew Dashboard Background The Problem As the customer face of Virgin Blue, the airline's Cabin Crew team have high standards to maintain. This year Virgin Blue won the Customer Service Institute of Australia's “2008 Australian Service Excellence Award” for a large business and the Institute's “Best of the Best” award. The accolade is due in no small part to highest standards of customer service at the frontline which starts with recruiting the right people and continues through…
Strategic competitiveness in Virgin Blue Since its initial two aircrafts, Virgin Blue enlarged to all main cities and popular holiday attractions, and become one of Australian greatest domestic airlines. Through enlarging offerings and continuous developments of the low-cost services, the company has run strongly. The main purpose of this report is to apply strategic management theory to the case study of Virgin Blue, to make sure whether Virgin Blue has gained strategic competitiveness in strategic…
Alexis Wells Business 520 Dr. Latrice Cooper February 27, 2013 Overview The Virgin Group, Ltd. is a British based venture capital organization founded by Richard Branson, incorporated in 1989. The focus of their business group is travel, entertainment, and lifestyle, and while actually incorporating as a venture capital group in the late 1980s, they had a number of activities in the 1970s. To date, Virgin has created more than 300 companies globally, employing over 50,000 people in 30 countries…
When examining this case study on Virgin Mobile USA and evaluating the different pricing options, we believe Virgin Mobile has two options moving forward. The first option is the obvious choice for their target market, and for any new product entering a saturated market; the pricing should be quite low if not the cheapest product out in the market. The second pricing structure that would appeal to Virgin Mobile is pricing their product in the middle or average of the industry standard. Moving forward…
offer unique features from their operation management, then a customer’s has no option that to pay extra for it and most importantly remain loyal to the same organization[2]. Virgin Australian Airline Virgin Australian Airlines in one of the largest airline and the largest by fleet size to use the virgin brand. It was established in the year 2000 and now serves 29 cities in Australia using its Boeing and Embrear jets and Airbus. It is well known for as a low cost carrier using a business…
dress up as well. By selecting a WonderFlight, each ticket will be charged $10.00 on top of the fare, while $5.00 will be contributed to Virgin Blueʼs RedJet Foundation for charity purposes. For the polaroid picture service, $8.00 is charged for each picture, and 30% of our takings goes to the World Wildlife Fund for the conservation of the Great Barrier Reef. Virgin Blue is in a great position to invest in this innovative business idea as it now faces stiff competition from other airlines such as JetStar…
quality or choice making for consumers as they have less or no ideas about the quality of certain goods in some case. As branded of its services, Virgin Atlantic is giving their customers what they want, by offering limousine services, full meal catering, multi-class services, and entertainment consoles on every seat-back. (Stealing Share, 2006) Thus, the perceived brand quality of Virgin aircrafts is quite high; customers probably would consider it firstly or secondly while they are choosing an airline…