5. What do you think of Virgin Mobile’s value proposition (the VirginXtras, etc.)? What do you think of its channel and merchandising strategy?
We think that Virgin Mobile’s value proposition is very effective to its target market (14 to 24-year-olds). Virgin Mobile positions its brand is what the target market wants and is all about fun, honesty and great value for money. They do not only provide basic cellular service, but also push cell phone content to a new level that involves the delivery of content, features, and entertainment, which they call “VirginXtras.” Virgin Mobile customers have exclusive access to MTV, VH1 and Nickelodeon based content. This strategy appeals to the youth since most of their customers are MTV followers. Besides that, MTV networks is home to some of the most recognized youth brands in the country which is a perfect match to Virgin Mobile’s target market. Customers are given easy ways to vote for their favorite videos on shows ...view middle of the document...
So the amount of text messages will be huge. Online real-time billing provides customers a way to see call details and track monthly bills. Rescue ring is a new function, which may surprise customers. Nowadays, many young people do not have an alarm clock, they use cell phones to wake them up. Various wake-up calls will be favorite among youth. Ring tone shows a person’s taste of music and personality, it is used frequently by young customers. And other features such as fun clips and the hit list give a user quick ways to get updated news and connect closely with friend circle. Such value proposition would likely to generate additional usage and create customer loyalty in youth market, which would be very profitable for Virgin Mobile.
Virgin Mobile has unique channeling and merchandising strategies that are more closely aligned to its target-market selection. Most cellular providers sell their products in own retail outlets; malls, high-end electronic stores and so on, but Virgin Mobile distributes in channels where youth shop like Target, Sam Goody music stores and Best Buy. These places are cool shopping places in young people’s views. Also Kids have habits to buy consumer electronic products in these stores. So instead of packaging in a locked box behind counters, Virgin Mobile creates a clear and see-through package where consumers can choose the phone without the harassment by salespeople and purchase it like the way, as they are other consumer electronic products. It also creates large point-of-sales displays to feature the new packaging. The Starter Packs would be available at retailers such as Sam Goody, Circuit City, Media Play, and Virgin Megastores. Virgin Mobile not only changes the package, but also builds an effective way to market. Its advertising budget is approximately $60 million, which is miniscule by comparison with Verizon Wireless. As the CEO mentioned, “Unless you are between 14 and 24, you are probably never going to see our ads.” They get a tighter focus on a much narrower market, so they can get message out to consumers more efficiently than competitors. The team designs ads featured teens and works with youth magazines, also is going to plan high-profile street marketing events and an unusual event to launch the Virgin Mobile USA service.