STUDENT: | Louis-Claude ROUX
PROFESSOR: | Philippe René Gillet
CASE: Virgin Mobile UNITED STATES " Prices for the first time”| DATE: 20/02/2012CLASS: MBS-Entrepreneuriat
COMPONENT I) ANSWERS BASED ON MY " STOMACH FEELINGS”
Virgin Mobile targets the 14 to 24-year-olds market. The case lies out 3 pricing options. Which choice would you choose and how come?
I would select option number two for several factors. The first one is that I think offer number one is definitely not sufficiently different from all of those other market. The cost positioning is the same and we only progress off top hours, allegedly " fewer hidden fees” and applications. Virgin Xtras is a innovative idea of course suits Virgin's image and targeted young audience, however I don't think it is a eco friendly selling argument. It is the cherry wood on the top of the cake, but it is not really meaningful to the consumer as a main sole benefits.
Option amount three can be way too groundbreaking to have success for the US marketplace. First of all, 90% of US readers choose postpaid services because it is almost well known that it is a better deal. It appears like a dangerous technique to go in such a small specialized niche it you need to reach substantial numbers of people. Secondly, there is the contract concern that tends to push the client away to start with but finally secures his fidelity over the one to two year period. In my opinion that Virgin mobile should try to facilitate the credit check process, but having no agreement at all appears dangerous with regards to churn price (going from 2% to 6%).
Option number two appears like a good alternative because cash is always an effective argument and most customers apparently feel like they are really paying too much. Besides, were focusing on a target audience (14 to 30 years old) that has a little budget. Concentrating on the 90 to three hundred minute target audience is also very well adapted to our target audience's need. Keeping the " buckets” of day is also a very important thing because do not take the risk to mistake people with some thing entirely several. The industry's offers already are complicated enough, it is good to keep the criteria that work (Buckets, On/Off peak).
COMPONENT II) MARKET ANALYSIS
Exactly what are the types of all of this unhappiness?
The main reason behind this kind of dissatisfaction is definitely confusion. The pricing programs are very hard to understand for most of us. You need to have a sales person committed to the providing process when you come towards the store since explaining can be behind every cost is not only a simple job. There are many hidden fees and comparing the deals between cellular operators takes a lots of time. It is hard to learn if you are taking the right decision that the normal customer requires a human support (sales person) to be comfortable enough to make up his mind.
Which is first area of the buying encounter, because after you have chosen the proper cell phone as well as the appropriate intake plan, you still need to go throughout the credit check process. Like it says in the case, 30% of the prospective customers fail to move the credit check because they either shortage the information required or that they just do unfit the criterias that are required. Another way to obtain dissatisfaction is a contract issue because no one likes to feel attached to an organization or company for one or two years. It is a very competitive business as well as the offers seem very similar. Unhappiness is also as a result of frustration you experience when you find an improved deal while still staying bound with a contract.
How have the different pricing factors (ex agreements, pricing and therefore, hidden service fees, off-peak hours) affected the consumer experience?
The contract issue is a agonizing experience which enables the customer unwilling to go additional in the shopping for process. It's the main description for the tiny...