Globally, it is known that young people interact more effectively than older people do. There are most likely to purchase the commodity to fulfill their need for socializing. Youths particularly teens mostly use MMS and SMS that is affordable. Mcgovern continues to indicate that, young people are so much addicted to mobile phones that they can hardly live without them. Internet and media contact via mobiles are much preferred by youths as compared to other segments. Online games and internet are most used by youths as most identify themselves with the emerging technology.
With this in mind, I agree with the Virgin mobile’s target market selection of young people as their lives revolve technology. However, the risk associated with targeting this market is that most of them depend on their parents for their needs thus becomes hard to purchase an expensive choice. Most people in this target selection are students and few working. Secondly, there is a risk in targeting this target group in that a Company needs to set affordable prices that meet this group’s needs. Lastly, either most consumers are leaving at home or in college, thus their usage is inconsistent with a time they may not use the phone especially when in school or vacation.
Given the Virgin Mobile’s target market (14-24 years old) the Company should structures it’s pricing at an affordable price that is not too low for the Company and still not high for consumers. This flexibility makes youths to modify their plans to purchase what they want and need. The case lays out three pricing option that includes Clone to the Industry Prices, Prices underneath the Competition, and the Whole New Plan Option.
From the three pricing options, I would choose the third policy of the Whole New Plan that entails introducing different pricing structure with different pricing dimensions. When this is done, it eliminates contracts that would create a competitive advantage to reach the target group.