Marketing – Master of Management 78-614
Odette School of Business, University of Windsor
Write-up
Title of case: Virgin Mobile USA: Pricing for the Very First Time
Key person and his / her position in the organization:
Dan Schulman, CEO of Virgin Mobile USA
Key issue or decision that must be made:
The key issue for Virgin Mobile USA is to select a pricing strategy that will both attract and retrain subscribers.
Basic facts of the case:
Virgin is a U.K-based company led by Sir Richard Branson and is one of the three most recognized brands in Britain. The company has a vast history of brand extensions – one of which is their launch of a wireless phone service in the USA. Dan Schulman has been appointed CEO of the Virgin Mobile USA branch and is now trying to determine what pricing strategy would be most efficient in attracting and sustaining customers in the USA. There are several other decisions which also need to be made, such as who the target market will be, what unique features Virgin mobile can offer to differentiate from their competition, which channels to use in order to sell their product and how to advertise their product most efficiently.
Alternatives: There are 3 alternatives in regards to the key decision:
(1) “Clone Industry Prices:” clone existing price structure –priced competitively with a few key advantages like differentiated applications and superior customer service.
(2) “Price Below the Competition:” adopt similar pricing structure as that of the rest of the industry with actual prices slightly below th ...