Virgin
...fies its needs with Virgin Mobile values: high quality, innovation, fun, honesty and value for the money. The segment of young Americans between 14 to 24 years has low access to the mobile industry due to their demographic condition, inaccessibility to credit history, age, dependency on their parents and a weak financial position that restricts them to engage on an inflexible one year contract. Among other things, this niche segment shares the common dissatisfaction that the general consumer in the industry feels, like confusion on prices, conservative credit policies To enter into this market, Virgin Mobile has designed a product that will satisfy the needs of the targeted consumers and will alleviate their discontent, offering them a value added product that focuses on providing a feeling of independence, fashion and other features that target their life style. To send the right message to the consumers, Virgin Mobile needs to set a pricing strategy that will be based on the targeted segment needs: accessible (low prices for phones), service easy to acquire (non-credit check), clear pricing policy (fixed average price per minute), affordable to everyone (different range of prices, i.e. $10, $20, $30) and extra features depending on pricing plans (i.e. text messaging, download music, etc.) To provide the right product to the market we need to choose within three options that are required to comply with 3 constrains: (1) make sure prices are competitive, (2) make sure we can make money, and (3) not to trigger a competitive reaction. Taking into consideration this constrains and the targeted segment needs we have come to the following conclusion: The first option does not offer differentiation from the competition and the second option triggers a price war that we are trying to avoid, potentially reducing our margins and be run out by the competitors. Therefore, our preferred option is number 3, to develop a pricing policy that will help us to create a marketing mix that will satisfy the targeted consumer and comply with the business constraints....