Problem Statement
Virgin is one of the top recognized brands in Britain, and is mostly known for the diversity of products that it represents and the values, which it entails. Now they are looking to go into the US market with their Virgin Mobile brand. The main problem that Virgin Mobile USA was facing was entering a mature, over-crowded mobile industry market. Based on the fact that in the US had six national carriers and the industry penetration was almost 50%, they had to find a way to be successful in the mobile industry.
Situation Analysis
Customers-
Virgin mobile is going to target young customers aged between 15-29. These are customers which needs haven’t been met by the current industry players. Customers in this age group are about to get their first cell phone, in high school, college, or just leaving their homes. At the present time the market penetration by age group in the US was of 17% (ages 15-19) and of 45% (ages 20-29), compared with other countries of similar cellular phone usage was significantly lower. On average countries such as Japan, Finland, and U.K had market penetrations of 70% (ages 15-19) and 75% (ages 20-29).
Competition-
Based on the fact that Virgin wants to target a Niche, they will find competition however they can be leaders if they create a difference in knowing, understanding and meeting their customers needs.
The main competitors are AT&T, Cingular, Verizon, Voice Stream, Alltel, and Sprint although these carriers haven’t targeted this specific segment. The main reasons that major carriers have not targeted this specific segment where:
a. Young customers usually have poor credit history
b. The average cost to acquire a customer was $370, and they believe ...