Power and Smile

BAB25 2014 | Dr. Nicole Mead

Case Analysis: Virgin Mobile USA

Due: May 8th, 2014 (hardcopy is due at 3pm (beginning of class) and safeassign copy must be uploaded by 23:59h)

Your task is to devise a strategic marketing plan for Virgin Mobile USA based on the information given to you in the case. This particular case is designed to test your hand at developing a profitable pricing plan. Nevertheless, you must include your 3Cs, STP, and 4Ps. Your marketing plan must be internally consistent.

The case analysis must include the following:

1. A brief opening paragraph which states the problems you've been asked to solve in the case.

1. Marketing analysis (3Cs). Draw implications from case facts, data and exhibits (i.e., go beyond restating the facts).

1. STP: your strategic recommendations. Make sure you show how the recommendations follow from your previous analysis.  

1. Your marketing mix. Devise specific (4P) actions.

1. Exhibits as needed to support your analysis (in this case, financial analyses to detail the profitability of your pricing strategy).

Guiding Questions

When reading the case and preparing your analysis and comments for class, consider the following questions:

1. How do the major carriers make money in this industry? Is there a financial logic underlying their pricing approach?
2. The cellular industry is notorious for high customer dissatisfaction. Despite the existence of service contracts, the big carriers churn roughly 24% of their customers each year. What is the source of all this dissatisfaction? How have the different pricing variables affected the customer experience? Why haven’t the big carriers responded more aggressively to customer dissatisfaction?  
3. Do you agree with Virgin Mobile’s target market selection (if not, justify your choice of a new target market)? What are the risks associated with targeting this segment? Why have the major carriers been slow to target this segment?
4. Given Virgin Mobile’s target market (14 to 24-year-olds), how should it structure its pricing? In designing your pricing plan, be as specific as possible with respect to the various elements under consideration (e.g., contracts, the size of subsidies, hidden fees, average per-minute charges etc.)
5. How confident are you that the plan you have designed will be profitable? Provide evidence of the financial viability of your pricing plan.

Please identify your case with all the student ID numbers and/or names of the group members.  

The TEXT part of case write-ups cannot exceed two typewritten pages (formatting requirements: double-spaced, 11 point font or higher, Times New Roman font, margins > 2 cm on all sides). Additional material may be included in exhibits (exhibits cannot exceed two additional pages). To level the playing field, these limits will be strictly enforced.  If you include a cover page, this will not count toward your page limit.