Virgin Mobile Case Study Summary

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VIRGIN MOBILE CASE
INTRODUCTION:
Virgin is a leading branded venture capital organization. It is conceived in 1970 by Sir Richard Branson, the Virgin Group has gone on to grow very successful business in sectors ranging from mobile telephony, to transportation, travel, financial services, leisure, music, holidays, publishing and retailing. Virgin has created more than 200 branded companies worldwide, employing approximately 50,000 people, in 29 countries.
TARGET MARKET:
The core-competency of Virgin mobile is making a difference in the eyes of the customer in terms of value for money, Quality, Innovation, Fun, A sense of Cool-ness. It identified the age segment where the Industry penetration was the lowest, that is, between 15 years to 29 years of age. Also, by demography, it targeted income segment with a low disposable income and high aspiration for trendiness.
Since the target market for Virgin mobile is youth segment, it makes sense to develop a value proposition like VirginXtras. The revenue for mobile entertainment is projected to increase in the next few years (Exhibit 3). So, by offering value added services like delivering music, video and game content of MTV, VH1, and Nickelodeon etc. Virgin can increase its sales.

PRICING STRATEGIES FOR THIS SEGMENT:
Option 1 – Clone the industry prices
Pros:
Easy to promote, No need to spend more money on salespeople, Customers are used to ‘buckets’ and peak / off – peak distinctions
Cons:
Highly competitive market. Very difficult for new entrants, Since there will be no real distinction on prices, consumers may not be willing to switch over to virgin, Focus is on targeting youth market. But, there is no stress on target market
Option 2 – Price below competition
Pros:
Since the price per minute is set below the industry standards, Virgin can easily expand its…...

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