Strategic Management

A Marketing Project On

VIRGIN MOBILE-‘THINK HAT KE’

Submitted To:
Prof. Vinay Pandit
 VIRGIN MOBILE-THINK HAT KE

Presented By:-
Raahil Shah
Sajil Shah
Jai Panjwani
Husayn Kopty
Sunny Jain
Shail Madlani

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TABLE OF CONTENTS

INTRODUCTION

UNDERSTANDING VIRGIN’S BUSINESS MODEL

COMMUNICATING THE VIRGIN BRAND

TARGET MARKET

CUSTOMER ACQUISITION AND RETENTION STRATEGIES

VALUE CREATION THROUGH PRODUCT DESIGN

MARKETING MIX

DISTRIBUTION CHANNEL

COMPETITION

CUSTOMER RESEARCH

CASE STUDY

RECOMMENDATIONS

EXIBIT

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INTRODUCTION-WHY VIRGIN MOBILE?

In Indian mobile market, Virgin mobile is a unique player based on its business model and
strategy. It is the only service provider which does not hold any bandwidth and mobile setup
infrastructure but uses Tata Teleservices spectrum and is penetrating market totally on its
branding and marketing strategy. Creating a niche brand and promoting it to specific customer
segment with proper marketing has been the key success factor for virgin mobile across the
globe. So, from marketing and customer understanding point of view, this is a very unique
company to study.

UNDERSTANDING VIRGIN’S BUSINESS MODEL:

Virgin has promoted itself as the brand for young India, keeping the Indian youth as its target
customer segment. The idea behind targeting this segment can be found inherited in virgin’s
business model. The different marketing perspectives are explained in fig 1.

The salient features of Virgin’s business model from customer perspective are:

1) With intensive competition and reducing voice tariffs, the profit margins for voice service
are decreasing day by day. So, the future profit strategy is maximizing profit margins
through data services and it is youth segment which provides maximum data service
revenues.

2) Future projection of increasing young and working population of India as 65% of overall
population by 2020.

3) Increased use of data services in future due to technological advancements.

So, in mobile sector where all other players are trying to provide similar service to different customer
segments, virgin is targeting specific segment with tailor made plans keeping its long term goals in mind.

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NETWORK DISTRIBUTION CHANNEL

Tata
Online Retail
Teleservice
Bluedart selling Access
s

Samsung

VIRGIN MOBILE
BRAND

PRODUCT DESIGN COMMUNICATING VALUE

PROPOSITION
Paid Youth
50 paisa Young &
incoming centric
STD Vibrant
calls advertiseme website
nts
Value
VBYTES added
servicesVirgin brand through various market channels
Fig 1: Creating

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COMMUNICATING THE VIRGIN BRAND:

Virgin mobile has communicated itself as the youth oriented brand of India through various
communication channels. They are:

a) “Think Hat ke” advertisement campaign targeting youth

b) Red and vibrant website look with youth focused language (Fig 2)

c) Tailor made plans for young segment

d) Getting paid for incoming calls: a source of recharge option for youth

Fig 2. Virgin Mobile website depicting youth flavor

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TARGET MARKET:

The Virgin Mobile Brand, targets Indian youth aged between 14 and 25 years. There are 215
million people in this age group. Out of this, 70 million own a mobile phone and this segment is
expected to add another 50 million new subscribers in the next three years. Though young
subscribers constitute only 30 percent of the total mobile subscribers, they contribute more than
50 percent of the revenues of telecom industry. By 2010 this group is expected to contribute 60-
70 percent of total revenues.

The distinct mobile phone usage habits of the young users provide a huge advantage to Virgin
Mobile. They make more and longer out-bound voice calls, which means huge billing potential
for service providers. The usage of SMS, data services in the form of mobile internet, mobile
shopping and other value added services like ring tones, caller tunes, wallpapers, etc are very
high in this group which again provides a huge opportunity to be tapped. Moreover young users
have a short handset up gradation cycle-under 12 months as compared to two years for people
above 25 years of age.

CUSTOMER ACQUISITION AND RETENTION STRATEGIES:

The company knows that they are trying to position themselves into a very established and
competitive market. They understand the fact that they cannot start making profit from day one
neither they have plans for it; they anticipate to achieve a subscriber base of 5 million in next
three years and will make profit afterwards they will be able to break even in three year or so.

According to the patron, Sir Richard “We want to deliver a more tailored and relevant offering
for a single segment.” Company targets only 10% of the above mentioned segment and have
plans to acquire and retain them by various innovative propositions, some of them are-

1) Providing services which were not offered so far

a) Get paid for incoming calls.

b) 50 paisa for all calls across the country.

c) A brand truly meant for the young India which is reflected at each & every touch point.
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d) Extensive data service offers in the form of vbytes.

e) Excellent value added plans.

f) Go online facility for enquiry, purchasing phone, recharging and everything.

g) One touch VAS access from every virgin mobile.

2) Providing services which others are not providing meticulously

a) Easy to change the handset from a wide range of handset providing at very reasonable
prices.

b) Boring customer care services telling you are in queue.

c) One customer care officer dedicated for all queries of one customer leading to transparency.

d) No jammed or bad network coverage.

e) Tailor made customized plans without any hidden charges.

f) No monthly bills.

VALUE CREATION THROUGH PRODUCT DESIGN:

Various steps that Virgin is taking to add value to the customer are on price, quality, technology
and social front. Company is providing the best prices in whichever plan you go, quality of
signals is not only comparable but better than most of the service providers, on technology front
it is the first in India to go for one-touch VAS access from every Virgin Mobile.

MARKETING MIX:

The marketing mix is the combination of marketing activities that an organisation in so as to

best meet the needs of its targeted market.

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Product: Virgin Mobile offers six RUIM enabled handsets with colour screen, FM radio and
include one touch access for Vbytes-Virgin Mobile’s VAS portal.

Price: The handsets are priced in the range of Rs2000-5000.The call tariff is very nominal which
is 50p per call both local and STD subject to terms and conditions.

Place: The focus of Virgin Mobile on customer acquisition has so far been in the top 60 cities of
India and is set to extend to more cities. The product is available across a host of modern retail
outlets The Mobile Store, Hotspot, RPG Cellucom, Croma etc.

Promotion: Virgin Mobile entered the Indian market in grand style. The company surprised the
readers of a leading Indian daily when all the headlines on the front page were in the colour red.
Virgin Mobile has used a very vibrant colour to relate itself with the targeted market. Apart from
traditional media, internet and outdoor youth centric advertising has been used wisely to attract
the targeted audience.

DISTRIBUTION CHANNEL:

Virgin mobile makes its products available to the customer by both retail stores and online
distribution.

Selective Distribution:

Virgin mobile has selected some retail outlets to distribute its products. It does not follow the
strategy of intensive and exclusive distribution. The strategy of selective distribution helps the
company gain optimum market coverage and more control but at a lesser cost than intensive
distribution.

Virgin Mobile launched a new mobile handset vBling on 7 July 2008. vBling is available across
15,000 outlets nationally and over 1000 modern retail outlets including The Mobile Store,
Univercell, Croma, Convergem, Big C, Vishal Mega Mart, Vijay Sales and Sangeetha to name a
few. Apart from this, the handset will also be available in 34 kiosks in high traffic malls across
the country.

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Online Distribution:

Virgin Mobile India has announced that customers can now buy Virgin Mobile branded
products and services online. They just need to select the handset, plan and number of their

choice by filling an online form. Post the payment transaction, handsets will be delivered

to the customer within 24 - 48 hours and the requisite documents for proof of identity will
be collected in person. Customers taking advantage of online shopping will also be offered
additional talk time, extra messages as well as other freebies.
Disintermediation and re-aggregation: The different features of the online distribution are
stated as follows:

• Intermediary becomes redundant as customer buys directly from the firm using web
technology.
• Customization becomes easier and feasible which adds to the customer value.
• Re-aggregation occurs in the sense that companies today encourage customers to lodge
their complaints or send their queries on the net. These are then routed to another site
where they are dealt with immediately in a seamless manner. So it helps in improving the
overall efficiency of the channel.

For the delivery of the ordered products Virgin Mobile has tied up with Blue Dart.

COMPETITION:

Virgin Mobile has entered into a very competitive industry where Airtel, Vodafone and Reliance
are the dominant players. Virgin Mobile faces stiff competition from Reliance CDMA phones.
Virgin Mobile have taken a ‘hatke’ route and launched the brand in the youth segment. The tie
up with Tata Teleservices enables it to fight competition as the network quality of Tata
Teleservices was ranked first by DOT. The company is spending huge chunks of money to

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promote their VAS services and it would be interesting to watch out what Virgin Mobile plans to
offer.

CUSTOMER RESEARCH:

In order to understand target market’s expectation and virgin customers experience about the
product, we have done a survey with a sample size 30 each. The questionnaire was prepared and
sent across to the customer and also the feedback was collected in person. Two different surveys
are:

1) Virgin’s customer survey about product and customer service experience

Analysis of target customer’s expectation survey:

In order to find target market’s expectation from the brand, we performed a survey and came up
with relevant findings. They are represented in the form of Pie chart (Exhibit 3):

1) 42% of customers rate price and 33% rate mobile set compatibility as first preference
while using a mobile service.

2) 10% of customers surveyed were virgin customers where as 21% of them felt Virgin is
the most cost effective brand.

3) In terms of cost effectiveness, Virgin stands 2nd with 21% share where as Airtel,
Vodafone and Reliance stood at 1st place with 24% share each.

4) 88% of consumers were aware of paid incoming call facility provided by virgin but only
68% knew about 50 paisa STD plan.

5) 14 % of customers surveyed who were not virgin customers wanted to switch to virgin
mobile.

6) 36% of customers did not want to switch to virgin because of holding a non- compatible
handset.

7) An important finding was that 12% consumers surveyed did not know about Virgin
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mobile service.

Analysis of Customer Satisfaction Survey:

We conducted a survey in order to find out the customer experience with Virgin mobile and
their overall satisfaction level. The data is presented in the form of Pie chart in the Exhibit 2
and analysis is presented below:

1) Most of the customers (80%) feel that the product and service which they are using is
reliable and they are very much satisfied with it.

2) It was found that time gap between the services sought and delivered was high. For e.g.
the online orders did not reach on time on many occasions.

3) The quality of the network was found to be very good. Using the bandwidth owned by
Tata Teleservices, actually helped Virgin in making its presence in the market.

4) It was also found that the customer care were always available to assist and customers
were satisfied with the kind of responses which they got form the staff.

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Case Study

Virgin Mobile India Limited, New Delhi, Delhi, India

Founded in the spring of 2008, the Virgin Mobile India brand is India’s first national,
youth-focused mobile service. With presence now across 45,000 outlets, Virgin Mobile
India reaches over 320,000 cities, towns and villages across India.

The Virgin Mobile branded services are offered to Indian consumers by Tata
Teleservices through a brand franchise with Virgin Mobile. Virgin Mobile provides the
expertise and marketing of the brand while Tata Teleservices operates the network
infrastructure.

The parent company, Virgin Mobile, is one of the world’s most recognized brands. The
organization was the world’s first Mobile Virtual Network Operator when it launched in
the UK in 1998. Conceived in 1970 by Sir Richard Branson, the Virgin Mobile Group has
gone on to grow very successful businesses in sectors ranging from mobile telephony,
transportation, travel, financial services, leisure, music, holidays, publishing and
retailing. Virgin Mobile has created more than 200 branded companies worldwide,
employing approximately 50,000 people in 29 countries. Its revenues around the world
in 2006 exceeded £10 billion (approximately $20 billion.)

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• CHALLENGE: As a brand new entity in India, Virgin Mobile India needed a

communications tool that delivered superior quality, unique flexibility and unmatched
price performance.
• SOLUTION: LifeSize HD endpoints were installed in Virgin Mobile India’s key locations
in Mumbai and New Delhi, including LifeSize® Room™ HD video communications
systems.
RESULTS: more productive workforce.

RECOMMENDATIONS:

1) Virgin should try to promote its latest plans like 50 paisa STD calls in advertisements.
Making customers aware about latest pricing will increase its market share in terms of cost
effectiveness.

2) Virgin should try to tap 14% of customer base who want to switch to virgin but not able
to switch because of existing non-compatible handset.

3) Solving existing non-compatible handset problem and better communication to inform

latest pricing strategies will lead to substantial increase in consumer base for virgin mobile.

4) In order to enhance customer satisfaction, time gap between services sought and
delivered should be minimized.

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Questionnaire for the Virgin Customers:

Please fill this questionnaire and rate Virgin Mobile on the following aspects from 1 to 5,
with 5 representing excellent i.e. highly satisfied and 1 being poor i.e. highly dissatisfied.

1. How is the proximity of the service centre?

1 2 3 4 5

2. Is the delivery point user friendly?

1 2 3 4 5

3. How satisfied are you with time gap between services sought and delivered?

1 2 3 4 5

4. How accessible is the customer care on phone?

1 2 3 4 5

5. How well does the customer care respond to the queries of the customer?

1 2 3 4 5

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6. How is the Network quality?

1 2 3 4 5

7. The overall satisfaction level with Virgin Mobile?

1 2 3 4 5

Exhibit

Proximity of service center

Excellent Poor
3% 7%

Very Good
Poor
30% Average
23% Average
Good
Very Good
Excellent

Good
37%

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User friendliness of delivery point

Poor
0% Average
7%

Good
Excellent 7%
33% Poor
Average
Good
Very Good
Excellent

Very Good
53%

Service T ime
Excellent
3%
Very Good
3% Poor
20%
Poor
Average
Good
Good Very Good
47% Average
27% Excellent

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Availability of customer care

Poor
0%
Excellent Average
13% 7%
Good
20% Poor
Average
Good
Very Good
Excellent

Very Good
60%

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Quality of service by customer care

Poor Average
0% 0%

Good
10%

Very Good Poor

20% Average
Good
Very Good

Excellent Excellent
70%

Network Quality
Average
Poor 0%Good
0% 10%
Very Good Poor
17% Average
Good
Very Good
Excellent Excellent
73%

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Overall Satisfaction Level

Poor
0%
Average
Excellent 7%
20%
Good
13% Poor
Average
Good
Very Good
Excellent

Very Good
60%

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