Virgin mobile is planning to bring a cellphone service to the 14- 24 year market, which are overlooked by the big carriers. The young market is overlooked by carriers because they lack good credit or any credit history at all. In addition, the customer dissatisfaction in the industry is high so Virgin plans to improve customer experience for young users. The goal for Virgin is creating brand loyalty.
It is would make the most sense to analyze the landscape of the whole industry using the Porter’s Five Forces Model. There is intense competition between these service providers because they hold a similar market share. The US wireless services in
Q4 of 2001 has a minimum of nine wireless providers (Statista). As of Q3 2017, there four dominant…show more content… Virgin has not explained on how they plan to market this value to parents. For example, parents might want to get their child a phone to call them, but not message them. There is a possibility that the young target market does not impact the actual purchase patterns. However, Virgin should market the VirginXtras like Rescue Ring, Wake-Up Call and Text Messaging to appeal to parent or guardian purchasing the phone or plan for them at first. Another weakness for the pricing is that the designs for the phones or the model names might not appeal to the younger audience. Since younger generation are more likely to form niches, it is best to give a base model and create customizable additions to the phones. With several weaknesses in the strategy, there are also opportunities. Virgin could make another revenue stream for their mobile division by creating phone accessories from cases to charms. These customizable features would also be a great marketing tool that isn’t expensive as an ad. For examples, students could be able to customize their phones exactly to their preference. If Virgin mobile can capture the younger market, the value of Virgin might penetrate through different target segments. Eventually, Virgin model will be able…show more content… Option one wouldn’t work because it still has hidden fees and the young wouldn’t be mindful of knowing what peak hours are and how it affects them. The young potential customers might get a higher bill than expected and just never return. Option 2 would not work since the telecom industry is capital intensive and wouldn’t be able to support growth or expansion to provide a quality service.
There are several causes of dissatisfaction in the industry. The pricing structure that penalizes overages and limited plan offerings that has fixed buckets that don’t make sense based off of usage patterns. Big carriers know customers don’t have a lot of choice between carriers and their pricing structure is profitable for them to pay off their high debts.
In conclusion, Virgin mobile should use option three and create a pricing plan from the start since they are pursuing an untapped market with special circumstances.
After analysis of the telecom industry, Virgin strategy doesn’t have any crippling weakness if they do extensive research on the target market and capitalize on their weakness to create a new revenue