Week #6 Assignment:
Virgin Mobile USA Case Analysis
June 15, 2008
Executive Summary
What we are analyzing here is pricing of a service in a market, which is saturated, as it has reached maturity, is highly capital intensive and in which a large amount of competition prevails. Virgin however is a known brand name with an extremely diversified portfolio. It has experimented successfully with the telecom business in the UK but failed in Singapore. It now targets the USA market; the problems before it are, to come up with an appealing offer and ensure a run rate of one million subscribers in the first year and three million by the fourth year. Keeping with the brand strategy and philosophy of making a difference, it enters areas, which are unserved or poorly served which in this case is the age group of 15-29 due to their low frequency of usage and poor credit rating. While targeting this segment lifestyle and psychographics factors are important as usage is inconsistent, and based on school and, vacation periods (Kerin & Peterson 2007).
With 76% of US households owning at least one phone, mobile is a seductive channel for US marketers. But consumers' preconditioned skepticism to mobile ads means that marketers must design campaigns that respect the medium and deliver value to targeted audiences. Fortunately, US marketers can learn from emerging best practices in four areas: 1) getting started; 2) campaign strategy; 3) targeting, and 4) campaign execution (Forrester.com).
The Market
Virgin Mobile USA, Inc. (NYSE: VM) is a leading national provider of wireless communications services, offering prepaid, or pay-as-you-go, services tar ...