Marketing Management
Virgin Mobile USA: Pricing for the Very First Time
Virgin Mobile is a recognized UK wireless communications company and brand with international
presence. It is known for being a company that has “value for money, quality, innovation, fun and
a sense of competitive challenge.” In the USA, Virgin Mobile wireless phone service was launched
in 2002 in a mature and overcrowded market. A 50-50 joint venture with Sprint was the business
strategy that Virgin decided to use. It would allow Virgin Mobile to host its services on Sprint’s
PCS Network and not have fixed cost or physical infrastructure. However, before the company
eventually started its services in the USA, “one of the key decisions […] was the selection of a
price strategy that would attract and retain subscribers.”
With that said, a STP (Segmentation, Targeting, Positioning) analysis was made to better
understand Virgin Mobile marketing strategy. In a very overcrowded and also mature
communications industry in the USA, Virgin Mobile identified a niche. There was a segment of
customers that were not served by the big and established companies. This segment was
customers aged 15 to 29 that had a big growth rate that was not considered for existing carriers.
Since young people are just starting their credit history, generally they do not have good credit
quality or even credit cards to meet the requirements for cellular contracts. They also were
identified as an irregular users and low income customers.
Despite these factors Virgin Mobile would have also very good reasons to believe this segment
