1. Virgin Mobile USA: Pricing for
the Very First Time
Group 4, Section A
Ajitesh Jaiswal (08P007)
Anuj Dharnidharka (08P013)
Reeti Bhatia (08P039)
Siddharth Singh (08P048)
Subhratosh Khan (08P050)
Varun Malik (08P053)
2. Virgin Group
• UK Based – Top 3 brands in UK
• Known for Brand Extension – 200
Virgin Brands
• Some Successful – Virgin Music
• Some Failed – Virgin Cola
4. Virgin Mobile – Operational
Model
• Leased Network – No network
maintenance issues
• Focus on Consumer Needs and Wants
• Revolutionary – Going with what Virgin
stands for
5. American Cellular Market
• Saturated – Everybody who should use a
mobile is using one and if one is not using a
mobile, its because he does not need one.
• Post Paid Based – 92% of all customers are
on a contract basis
• High Advertising – Verizon budget: $650
Million
• Unserved Youth Market – No carrier was
targeting this segment
6. Target Segment
• The Youth Segment – High School and
College Students – 15 to 29 year olds
• Open to new products – open to uses
• Untargeted till now
• Virgin Mobile decided to market the
mobile as much more than a device to
make calls – messaging, ringtones,
downloads etc.
7. VirginXtras
• Extras for the Target Segment
– Collaboration with MTV for downloadables
and airtime
– Text Messaging
– Ring Tones
– Rescue Ring
– Fun Clips
– Music Messenger
– Etc etc
8. Distribution
• No Salesmen – Strategic Distribution
• No retail outlets
• Kept in Stores frequented by youth –
Dollar Stores etc
• Available at retail shelf as any other
electronic product
10. Promotion
• Low Budget
• Target Segment Oriented
• Street Marketing
• Unusual Launch
• Articles in opinion-leading magazines
11. Pricing
• 3 options
– Clone the industry prices
– “Price below the Competition”
– “A whole new Plan”
12. Suggestion
• Create a new pricing plan
– Young Generation knows about hidden
costs
– Young Generation cannot enter into
contracts
– Should have the ability to stay hidden from
parents
13. Suggestion Contd.
• Should be based on Current Industry
Pricing Plans
– The pricing should be new, but should be
based on existing plans.
• Separate Text messaging plans and
Download plans
– These will not be billed
– On a pay first, use later basis
14. Suggestion Contd.
• Finally, Create a plan that the intended
user can support, i.e. Cheaper than
normal
• Since we do not have Salesperson to
explain our products, we need to have
a simple pricing plan that the user can
understand, If possible the plan should
be similar to others
