Virgin Mobile Usa - Pricing for the First Time

As Virgin Mobile is on the brink of entering a highly competitive and saturated mobile market and hoping to earn a profit, one of the most important decisions they will need to make is regarding price decision and price strategy. They have already zeroed in on who their target market will be and how they intend on differentiating themselves from current mobile providers. In their attempt to capture an untapped market, with teenagers and young adults, their main focus needs to be on how they intend on making plans and pricing more efficient and ultimately based on the needs and wants of their target market. Virgin Mobile needs to focus on issues with current mobile providers and what customers “do not” like about plans and pricing structures, additionally they need to pinpoint what this untapped market needs in order secure their loyalties in the long run. For these reasons, I believe that Option 3 (priced below market) would ultimately provide the most suitable and successful marketing strategy for this young, trendy, non-traditional cell phone market. Given the different needs that these users will have in addition to the fact that they will mostly be a limited or lower income clientele, a brand new strategy focused on offering the lowest prices, would be the best route to take. Additionally the layout of the phone with the VirginXtras is going to require a non-traditional way of marketing the phone as well. Selling it more as a fashion accessory, and focusing on how to personalize it and make it unique.

Virgin Mobile’s main objectives are to create a cell phone service that is going to create value, while creating profitability. They understand that the market they are targeting, ages 15-29, has an enormous opportunity for growth right now and is expected to continue over the next five years. Their intention and goal is to serve “1 million subscribers by year 1, and 3 million by year 4”. Given the fact that the majority of their market will be new to the...