Virgin Mobile Essay

2737 Words11 Pages
Given Virgin Mobile’s target market (14-24 year olds), how should it structure its pricing? When examining this case study, Virgin Mobile USA, and evaluating the different pricing options, it provokes the same question we addressed in class on Tuesday, October 23, 2007. How should a company, in this case Virgin Mobile, enter a market and take some of the market share? I believe Virgin Mobile has two options. The first option is the obvious for their target market and any new product entering a saturated market, the pricing should be low if not the cheapest product out in the market. The second pricing structure that would appeal to Virgin Mobile is pricing their product in the middle or average of the industry standard. Examining the first pricing structure strategy, it has positive and negative aspects to it. Some of the positive aspects include taking a great portion of the market share for those customers who value pricing in choosing their products. This pricing also goes along with Virgin’s target market, 14-24 year olds. This age group does not have a lot of spending money, if it is their own, or the parents’ do not want to pay a huge phone bill. The pricing would appeal to their target market and help create a young and hip image. While this pricing structure strategy would help gain consumers that value pricing when choosing their products, it can also work against Virgin Mobile. This pricing can create the image that the phones do not have as high of a quality if they are priced below the industry low. This structure would accomplish the goal of attaining a sizable amount of the market share, but it would not be as profitable as the second pricing structure strategy. The second pricing strategy looks to gain market share while earning a bigger profit. The pricing structure strategy would be to conduct research to find out what the industry is pricing.

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