1) Given Virgin Mobile’s target market, how should it structure its pricing? The case lays out three (3) pricing options. Which option would you choose and why? In designing your pricing plan, be as specific as possible with respect to the various elements under consideration .
2) The cellular industry is notorious for high customer dissatisfaction. Despite the existence of service contracts, the big carriers churn nearly 24% of their customers each year. There seems to be very little loyalty in the market. What do you think is the source of all this dissatisfaction? How have the various pricing variables affected the consumer experience? Why haven’t the big carriers responded more aggressively to customer dissatisfaction?
3) How do the major carriers make money in this industry? Is there a financial logic underlying their pricing approach?
4) What is your assessment of Virgin Mobile’s value proposition? What do you think of its channel and merchandising strategy?
5) Do you agree with Virgin Mobile’s target market selection? What are the risks associated with targeting this segment? Why do you think the major carriers have been slow to target this segment?
