Virgin Mobile Costs Strategy Essay

Virgin Mobile UNITED STATES Pricing Strategy1. ) Presented Virgin Mobile's target market (14 - 24-year-olds), how ought it to structure the pricing? The case lays away three costs options. Which will options will you choose and why? Always be as certain as possible with respect to the various components under factors (e. g., contracts, the dimensions of the subsidies, hidden fees, average per-minute charges, and so forth )Given Virgin Mobile's (VM) target market (14 - 24-year olds), I would suggest the company to structure the pricing based on the unit presented in Option 3. This option, even though appearing being quite revolutionary and intense, would allow VM to create its very own pricing structure while fixing a few of the problems that are so common inside the cell phone market. The goal of VM's pricing strategy was to make sure that they were able to offer competitive prices, while at the same time remain profitable and 1 step ahead of the competition. By going with Alternative 3, VM would be able to reach out to a wider range of consumers and meet up with their specific cell phone use needs. By reducing the long lasting contracts entirely, it would be a big advantage for VM from a client acquisition standpoint. For example , for the people people within the age of 18, they would certainly be able to obtain their own mobile phone through VM without having to inquire their father and mother or mom or dad to sign a contract on their behalf. This will open up opportunities to a huge potential customer basic and make more income for the corporation. As noticed in Exhibit two, there was a massive market transmission gap between U. S. and other countries especially in the " Ages 12-15 to 19" group. The word " not any contracts" has mass appeal, especially in the cellphone industry. Even though contracts provide a safety net and presented carriers with a hedge against customer proceeds (along with with a assured annuity stream), I think it is wise for VM to consider out of the container in this case. The chance of an increased churn rate will be minimal, as VM is definitely...



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