Dan Schulman, CEO of Virgin Mobile USA, to develop a pricing strategy for the new wireless phone aimed at consumers in their teens and twenties, many of which are believed to have a low credit quality and uneven patterns of use. Contrary to popular belief the industry, Shulman believes that he can build a profitable business on the basis of insufficient target segment. The key is pricing. Shulman is currently discussing three options for the price: 1) adoption of the pricing structure, which is approximately equivalent to the major carriers, 2) take a similar pricing structure, but with the actual prices below the major carriers, or 3) to come up with a different price structure. As for the third option, Shulman is considering various options, including dependent on advance payments (as opposed to post-paid) plans and the total elimination of contracts. Includes color exhibits.
To enhance their effectiveness, color cases should be printed in color. "Hide
by Gail McGovern Source: HBS Premier Case Collection 19 pages. Publication Date: Sep 09, 2003. Prod. #: 504028-PDF-ENG
