Essay on Virgin Mobile

1945 Words 8 Pages
Virgin Mobile

Given VMs target market, VM should structure its pricing model based on option 3. Virgin Mobile should institute the whole new plan model based on the fact that it is a radical departure from the rest of the cell phone industry. Refer to the Virgin brand values to find that one of their core values is to move into areas where customers have traditionally received a poor deal and offer something better, fresher, and more valuable. Virgin also takes pride in offering innovation and a sense of competitive challenge. Given the values of Virgin, the radical new pricing strategy offered by option 3 fits nicely with Virgin's core values. However, a final pricing decision should be based on much more than core values. Many other
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Option 3 actually removes the additional step of signing a contract in the purchase process by removing the need for parental approval. Also by choosing option 3, Virgin is incorporating the customer perspective. By targeting the 14-24 year old market, Virgin researched the buying habits and unique challenges this segment faces in the marketplace. Virgin understands the ease of eliminating contracts and credit checks for this age group and is considering this customer perspective by choosing option 3.
The source of customer dissatisfaction in the cell service industry stems from lack of customer focus by the major carriers. The basis of the cell service industry is gaining customers through long-term contract commitments fraught with confusing parameters. The contracts are not written from the perspective of the customer, rather they are written to insure customer commitment for a period of time. Once the customer is committed to a carrier, terms of the contract are inflexible. For example, if a customer exceeds allotted minutes one month but doesn't reach the minutes allotted the following month, the customer is charged for the overage and is not reimbursed for the minutes not used. This is an example of the supplier's gain at the expense of the customer's loss. The major carriers don't have a clear understanding of the customer's needs. If they don't understand the customers needs

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