Virgin Mobile Usa Case Analysis
Introduction:
Virgin Mobile is a successful company based in the U.K. The company is well known for its brand extension and was the first company to introduce the Mobile Virtual Network Operator (MVNO) in the U.K., where they leased network space form another firm instead of running a network in-house and as a result avoiding infrastructure and large fixed cost.
The company was well known for its hip and trendy position in the U.K., and catered to the youth market. Although they have had a couple failures in the past including launching the MVNO in Singapore, the company decided to venture into the U.S. market because they believed that the market was underserved particularly in the 15 to 29 age group.
Strategic issues and problems:
• Develop a value proposition that will appeal to the youth market
• Maintain customer loyalty and Life time Value
• Address the unmet needs of the target market
• Make the venture a profitable one
• Don’t want to trigger off competitive reaction
Analysis and Evaluation:
The Mobile communication industry in 2001 can be classified as an industry that was highly competitive, saturated, approaching maturity and overcrowded. The US industry when compared to Finland, UK, and Japan could be considered an industry that had room for growth. Finland had almost a 90% penetration rate especially in the ages 20 to 29 age group and Japan had almost an 80% penetration rate, In Finland and Japan the age group 20 to 29 was considered the highest user of mobile services and the age group 15 to 19 was the second highest with almost 80% in Finland and about 75% in Japan. In the USA however, penetration was about 50% in the 30-59 age group and as low as 15% in the 15 to 19 age group and in the 20 to 29 age group the penetration was about 40% indicating that there was a marketing niche for new entrants to make inroads in the industry if they offer the right marketing mix. The wireless phone industry in the USA had about 130 million
Virgin Mobile is a successful company based in the U.K. The company is well known for its brand extension and was the first company to introduce the Mobile Virtual Network Operator (MVNO) in the U.K., where they leased network space form another firm instead of running a network in-house and as a result avoiding infrastructure and large fixed cost.
The company was well known for its hip and trendy position in the U.K., and catered to the youth market. Although they have had a couple failures in the past including launching the MVNO in Singapore, the company decided to venture into the U.S. market because they believed that the market was underserved particularly in the 15 to 29 age group.
Strategic issues and problems:
• Develop a value proposition that will appeal to the youth market
• Maintain customer loyalty and Life time Value
• Address the unmet needs of the target market
• Make the venture a profitable one
• Don’t want to trigger off competitive reaction
Analysis and Evaluation:
The Mobile communication industry in 2001 can be classified as an industry that was highly competitive, saturated, approaching maturity and overcrowded. The US industry when compared to Finland, UK, and Japan could be considered an industry that had room for growth. Finland had almost a 90% penetration rate especially in the ages 20 to 29 age group and Japan had almost an 80% penetration rate, In Finland and Japan the age group 20 to 29 was considered the highest user of mobile services and the age group 15 to 19 was the second highest with almost 80% in Finland and about 75% in Japan. In the USA however, penetration was about 50% in the 30-59 age group and as low as 15% in the 15 to 19 age group and in the 20 to 29 age group the penetration was about 40% indicating that there was a marketing niche for new entrants to make inroads in the industry if they offer the right marketing mix. The wireless phone industry in the USA had about 130 million