1. Given Virgin Mobile’s target market (14 to 24-year-olds)‚ how should it structure its pricing? The case lays out three pricing options. Which option would you choose and why? In designing your pricing plan‚ be as specific as possible with respect to the various elements under considerations (e.g.‚ contracts‚ the size of the subsidies‚ hidden fees‚ average per-minute charges‚ etc.). I believe Virgin Mobile has two options. The first option is the obvious for their target market and any new
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There is nothing that will prevent Virgin from competing to an untapped market. Threat of Substitutes Weak o There are very few substitutes available that offer mobile and immediate communication. Alternative like pagers are outdated & this target market cannot afford sophisticated PDA service. Degree of Rivalry Strong o Competitors have brand recognition in the US and have the majority of the market share. Financial Analysis: Initially‚ Virgin may have no great profits since
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Virgin Mobile Paper A Case Study Analysis Presented to: 1 I. CASE SUMMARY Virgin‚ a U.K. based company led by Sir Richard Branson‚ has had a history of brand extension resulting to 200 different corporate entities. One of which is Virgin Mobile which has decided to expand to USA based on their success in the U.K. market. Dan Schulman‚ Virgin Mobile USA CEO‚ is tasked to lead the expansion to the U.S. and has decided to focus on consumers aged 15-29 given that there is low penetration
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Identify and Analyze the Courses of Action or Alternatives Traditionally Industry carriers are attempting to attract customers through manipulative pricing strategies leaving their clients unaware of the hidden fees‚ overly priced plans as well as potential competition which may offer a much better deal. Virgin Mobile became aware of this cellular anarchy and had to decide what pricing strategy would best attract their target niche and offer them unbeatable value so that competitors could not enter
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1 AEM 4160: STRATEGIC PRICING PROF.: JURA LIAUKONYTE VIRGIN CELL CASE: EXCERCISES Pricing Structure from the Carrier Perspective ¨ Contracts: ¤ ¤ ¤ Annual churn rate WITH contracts Annual churn rate WITHOUT contracts The difference: =2% * 12 months = 24% (p.8) =6% * 12 months = 72% (p.8) 72% - 24% = 48% Take AT&T example: customer base = 20.5 million If AT&T abandons the contract based plan how many new customers would it need to acquire to offset customers from an
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How do banks make money? Banks are just like other businesses. Their product just happens to be money. Other businesses sell widgets or services; banks sell money -- in the form of loans‚ certificates of deposit (CDs) and other financial products. They make money on the interest they charge on loans because that interest is higher than the interest they pay on depositors’ accounts. The interest rate a bank charges its borrowers depends on both the number of people who want to borrow and the
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Virgin Mobile USA: Pricing for the very first time Executive Summary Virgin is one of the world’s most recognized and respected brands. The company was established by Sir Richard Branson in 1970 and has been expanded into different areas such as travel‚ entertainment and lifestyle. Dan Schulman was appointed as CEO of Virgin Mobile USA in 2001‚ with 18 years experiences in telecom industry‚ Dan was confident that he would help Virgin to achieve 1 million subscribers by the end of first
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1) Do you agree with Virgin Mobile’s target market (14 to 24-year-olds) selection? What are the risks associated with targeting this segment? Why have the major carriers been slow to target this segment? - As a group‚ we all agreed to this TM. We find this strategy suit extremely well with virgins advertising budget‚ as niche market will mean that advertising can be specifically targeted towards the target market rather than as a whole. Specific media vehicles can be used such as interactive
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How Do Social Media Companies Like Facebook and Twitter Make Money http://www.marketoracle.co.uk/Article42647.html Oct 11‚ 2013 - 12:44 PM GMT By: Money_Morning Tara Clarke writes: Over the last month we’ve seen Facebook’s (Nasdaq: FB) dramatic share price rebound‚ Twitter’s stock IPO announcement‚ and LinkedIn (NYSE: LNKD) stock on fire‚ but have you ever wondered... how do social media companies make money? To find out‚ we turned to Money Morning E-commerce Director Bret Holmes. Part of
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Case Analysis: Virgin Mobile USA 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
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