Essay - Case Study Case: Virgin Mobile Usa: Pricing for the Very...

Case Study

CASE: Virgin Mobile USA: Pricing for the Very First Time

The cellular industry is legendary for customer dissatisfaction. With a 24% churn rate, clearly there is little loyalty, in spite of service contracts. What is the source of all this dissatisfaction? Why have ***** major carriers not responded aggressively?

***** are a variety of factors that contribute to the low levels of satisfaction and the high ***** rates as a result in the cellular industry. Much of the churn ***** dissatisfaction with cellular service providers is in their myopic and often deliberately confusing approach ***** defining ***** plans, service levels, service pricing, ***** the hidden service charges for calls made either outside the primary calling area, or outside the calling *****' peak time periods. The labyrinth of service plans, programs, and pricing programs has created so much confusion ***** the r*****e of pre-paid services and ***** certainty of costing they provide have actually been welcome even by credit-worthy customers as well. While all these factors contribute to the significant backl*****h cellular industry providers face, ***** daily frustrations of dropped calls and the lack of coverage in key ********** of ***** country al***** fuel the high churn ***** and typic*****ly ***** customer satisfaction scores that cellular industry providers gain in yearly satisfaction surveys. The bottom line is ***** while *****re are still technological *****sues that need to be resolved in order ***** cellular ***** providers ***** provide the level of coverage ***** claim, their myopic and very confusing approach to pricing plans and services is contributing to the high inventory churn.

While the sales organizations of ***** industry providers regularly battle with ***** services organizations ***** stress customer retention over *****, the sales forces in these companies see the market ***** still nascent in growing. The conflicts between sales ***** *****ir continual push to organic growth over services' customer ***** and lifetime value direction forces many of these companies to concentrate not on their customers, but ***** winning turf wars internally.

In summary, the major cellular industry *****, ***** continuing to build out their infrastructures and also creating a ***** ***** ***** complexity *****nd confusing in their *****, service and maintenance programs, have failed to focus on what matters most, and that ***** the cus*****mer ***** ***** evolving and changing needs. With 130 million subscribers and industry penetration calculated close to 50%, the mainstream cellular phone market appears to the six national carriers, regional and affiliate providers ***** be saturated. This assumption about the ***** also weighs in favor of those services organizations that argue that reducing churn is the most critical step to increasing lifetime *****, not ***** growth. The ignored 15 to 29 segment holds the greatest potential of all segments, yet has the same character*****tics ***** those segments that ***** proven to be the least profitable due ***** high ***** of inventory churn. The paradox *****se conflicting market dynamics create is what also fuels the ***** in all cellular ***** providers.

***** pricing strategy would you