Wednesday, October 30, 2019

Select 2 or 3 even 4 movies to conduct a comparison Movie Review

Select 2 or 3 even 4 movies to conduct a comparison - Movie Review Example ory of two men (Dieyi and Xiaolou) against the historical backdrop of a country in upheaval and how their lives are affected by the Japanese invasion of China in the 1930s and the victory of the Communists in 1949. The two meet at troupe and become very close friends. They, craving freedom, escape from the troupe but later return (Farewell my concubine, 2006). Douzi and Shitou grow on to be stars of Beijing opera and assume the stage names Cheng Dieyi and Duan Xiaolou. Dieyi falls in love with Xiaolou while a patron, Yuan Shiqing, makes advances at Dieyi. Xiaolou develops affection for Juxian and they later get engaged. Dieyi and Xiaolou have a falling out. Dieyi takes up with Master Yuan who gives him Zhangs sword. Master Guan shames them into re-forming the troupe. The relationships of the three main characters are tested in the political upheavals that follow. Xiao and Douzi disagree on Xiao’s training and punishment after which Xiao threatens vengeance. He makes good on the threat by usurping Dieyis role as the Concubine. Deiyi becomes an opium addict but is aided to the path of recovery by Xiaolou and Juxian. On the eve of the Cultural Revolution, after a few drinks, they rekindle their relationship. Under pressure, Shitou admits that Douzi performed for the Japanese and may have had a relationship with Yuan Shiqing. Douzi, angered by the revelation, tells the mob that Juxian was a prostitute. Shitou is forced to admit that he indeed married a prostitute but swears that he doesnt love her and will never see her again. Juxian is hurt by these words and commits suicide from a crushed heart. Xiao is caught by the Communist cadre in a gym elated by taking Douzi’s position and practicing Concubine Yus role (Farewell my concubine, 2 006). The grandmaster, starring Tony Leung as Ip Man, is a 2013 Hong Kong- Chinese martial arts film directed and written by Wong Kar-Wai and tells about the life of Wing Chun grandmaster Ip Man from the 1930s in Foshan, his

Monday, October 28, 2019

Grolsch Company Essay Example for Free

Grolsch Company Essay 1. Yes, several of the major players have been actively engaging in mergers and acquisitions, leading to a more concentrated market with larger market shares for the leading firms. 2. There is not a clear leader which absolutely dominates the industry. While Heineken is the leader in the international market, Bud (Light) leads total volume. There is also no core, the leading companies in international and total volume markets differ from each other. 3. In its process of expansion, Grolsch has engaged in both cooperation with local brewers, and direct shipping from domestic factories, depending on the markets demand. For markets such as the USA that valued originality, direct shipping was used. For others that did not hold an emphasis on this, joint venture options were explored to cut costs. 4. No, standardization is not increasing. Majority of Grolsch’s sales come from its Grolsch Premium Lager, with other variations such as Amsterdam beers. Packaging was not standardized around the globe, products shipped to different markets had country-specific labels. Grolsch is also priced differently in various markets, priced at a higher price in its domestic market. 5. It implies that minimum target should be to further enhance operations, increasing production and distribution efficiencies to achieve cost reduction in order to remain profitable. 6. Variation is quite large on cross-country markets. Grolsch is priced as a premium brand in non-domestic market and a mid range standard product in the Netherlands for Grolsch Premium Lager. Also, the different products offered in different regions also make them differ in profitability. For example, the home market that accounted for roughly 50% of sales in volume generated 65% of revenues with even higher EBIT. 7. Profits are most tightly linked with volume, with national sales as it is the most profitable providing the highest EBIT and lowest distribution costs. International sales have shown to be slightly less profitable but still important in overall profitability. 8. Price-sensitivity for beer is relatively low, with many competitors in the market so distribution on economic profits should lean more towards suppliers and complementors. 9. Labor took up approximately 15% of revenues compared to 4% to 6% on advertising. Hence, the industry Grolsch is in is most likely labor-intensive.

Saturday, October 26, 2019

Essay --

Currently in international market and domestic market, there are two types of the purchasing methods purchaser uses. One method for the buying the products from the market is â€Å"spot market buying† and the second method of buying the products is with â€Å"future contract†. The on the spot method is also called â€Å"cash market† or â€Å"physical market†, where the products, currencies or commodities sold for cash and delivers the products immediately or within short period of time. For example, â€Å"oil, grains, silver, beef, sugar, natural gas, milk, and gold are done through the spot market, where the prices are the set by open market and the transfer of cash and goods takes place immediately†, and deliver as requested date in the future or within short period of time. The spot market is an instantaneous exchange for the current list or spot price for a particular commodity. With the integration of internet technology, the spot market has be come even more efficient and useful especially in the energy industry. If energy companies have large surpluses of energy, the internet can give them a chance to find buyers in current need almost immediately. Though the spot market is good for company I need â€Å"right now†, its drawback is the fluctuating prices that can cause chaos when calculating the logistics over the long term. There are several pros and cons of on spot buying, such as; it conducts the market research and supplier identification quickly in new market. Also, it provides easy access for lower value purchases. Moreover, it improves the sourcing productivity; as well as alleviates the capacity issues that enhance the productivity of plant and category buyers. Also, it provides easy platform ability for market tests across geographies Though apro... ...vent of the futures contract negotiated by Calpine, it did not fulfill the need for sodium hypochlorite, which implementing the spot market as a way to assure the efficiency of operations that would be the decision most logically made. If Calpine’s buyers or sellers know that they will be buying certain chemical in future, and selling certain number of products or energy, then they should consider taking a long term future contract for purchasing, and short tern future contract for selling the products which hedge its positions in market. So, operations ramp up, more energy needs to be supplied for the increased demand that was not accounted for in the purchase of the particular chemical Calpine ordered. Supply of the chemical dwindles and it up to the men and women at Calpine to search the spot market to find a company with a surplus looking to sell â€Å"on the spot.†

Thursday, October 24, 2019

The Short Second Life of Bree Tanner Chapters 2

When the second body was empty, my throat felt better. There was a lot of blood in my system. I probably wouldn't real y burn for a few days. Diego was stil waiting, whistling quietly through his teeth. When I let the body fal to the ground with a thud, he turned back to me and smiled. â€Å"Um, thanks,† I said. He nodded. â€Å"You looked like you needed it more than me. I remember how hard it is in the beginning.† â€Å"Does it get easier?† He shrugged. â€Å"In some ways.† We looked at each other for a second. â€Å"Why don't we dump these bodies in the sound?† he suggested. I bent down, grabbed the dead blonde, and slung her limp body over my shoulder. I was about to get the other one, but Diego was there before me, the pimp already on his back. â€Å"I got it,† he said. I fol owed him up the al ey wal, and then we swung across the girders under the freeway. The lights from the cars below didn't touch us. I thought how stupid people were, how oblivious, and I was glad I wasn't one of the clueless. Hidden in the darkness, we made our way to an empty dock, closed for the night. Diego didn't hesitate at the end of the concrete, he just jumped right over the edge with his bulky burden and disappeared into the water. I slid in after him. He swam as sleek and quick as a shark, shooting deeper and farther out into the black sound. He stopped suddenly when he found what he was looking for – a huge, slime-covered boulder on the ocean floor, sea stars and garbage clinging to its sides. We had to be more than a hundred feet deep – to a human, it would have seemed pitch-black here. Diego let go of his bodies. They swayed slowly in the current beside him while he shoved his hand into the mucky sand at the base of the rock. After a second he found a hold and ripped the boulder up from its resting spot. The weight of it drove him waist-deep into the dark seafloor. He looked up and nodded to me. I swam down to him, hooking his bodies with one hand on my way. I shoved the blonde into the black hole under the rock, then pushed the second girl and the pimp in after her. I kicked them lightly to make sure they were in, and then got out of the way. Diego let the boulder fal . It wobbled a little, adjusting to the newly uneven foundation. He kicked his way out of the muck, swam to the top of the boulder, and then pushed it down, grinding the obstructions flat underneath. He swam back a few yards to view his work. Perfect, I mouthed. These three bodies would never resurface. Riley would never hear a story about them on the news. He grinned and held up his hand. It took me a minute to understand that he was looking for a high five. Hesitantly, I swam forward, tapped my palm to his, then kicked away, putting some distance between us. Diego got a weird expression on his face, and then he shot to the surface like a bul et. I darted up after him, confused. When I broke through to the air, he was almost choking on his laughter. â€Å"What?† He couldn't answer me for a minute. Final y he blurted out, â€Å"Worst high five ever.† I sniffed, irritated. â€Å"Couldn't be sure you weren't just going to rip my arm off or something.† Diego snorted. â€Å"I wouldn't do that.† â€Å"Anyone else would,† I countered. â€Å"True, that,† he agreed, suddenly not as amused. â€Å"You up for a little more hunting?† â€Å"Do you have to ask?† We came out of the water under a bridge and lucked right into two homeless guys sleeping in ancient, filthy sleeping bags on top of a shared mattress of old newspapers. Neither one of them woke up. Their blood was soured by alcohol, but stil better than nothing. We buried them in the sound, too, under a different rock. â€Å"Wel, I'm good for a few weeks,† Diego said when we were out of the water again, dripping on the end of another empty dock. I sighed. â€Å"I guess that's the easier part, right? I'l be burning again in a couple of days. And then Riley wil probably send me out with more of Raoul's mutants again.† â€Å"I can come with you, if you want. Riley pretty much lets me do what I want.† I thought about the offer, suspicious for a second. But Diego real y didn't seem like any of the others. I felt different with him. Like I didn't need to watch my back so much. â€Å"I'd like that,† I admitted. It felt off to say this. Too vulnerable or something. But Diego just said â€Å"cool† and smiled at me. â€Å"So how come Riley gives you such a long leash?† I asked, wondering about the relationship there. The more time I spent with Diego, the less I could picture him being in tight with Riley. Diego was so†¦ friendly. Nothing like Riley. But maybe it was an opposites-attract thing. â€Å"Riley knows he can trust me to clean up my messes. Speaking of which, do you mind running a quick errand?† I was starting to be entertained by this strange boy. Curious about him. I wanted to see what he would do. â€Å"Sure,† I said. He bounded across the dock toward the road that ran along the waterfront. I fol owed after. I caught the scent of a few humans, but I knew it was too dark and we were too fast for them to see us. He chose to travel across rooftops again. After a few jumps, I recognized both our scents. He was retracing our earlier path. And then we were back to that first al ey, where Kevin and the other guy had gotten stupid with the car. â€Å"Unbe liev able,† Diego growled. Kevin and Co. had just left, it appeared. Two other cars were stacked on top of the first, and a handful of bystanders had been added to the body count. The cops weren't here yet – because anyone who might have reported the mayhem was already dead. â€Å"Help me sort this out?† Diego asked. â€Å"Okay.† We dropped down, and Diego quickly threw the cars into a new arrangement, so that it sort of looked like they'd hit each other rather than been piled up by a giant tantrum-throwing baby. I grabbed the two dry, lifeless bodies abandoned on the pavement and stuffed them under the apparent site of impact. â€Å"Bad accident,† I commented. Diego grinned. He took a lighter out of a ziplock from his pocket and started igniting the clothes of the victims. I grabbed my own lighter – Riley reissued these when we went hunting; Kevin should have used his – and got to work on the upholstery. The bodies, dried out and laced with flammable venom, blazed up quickly. â€Å"Get back,† Diego warned, and I saw that he had the first car's gas hatch open and the lid screwed off the tank. I jumped up the closest wal, perching a story above to watch. He took a few steps back and lit a match. With perfect aim, he tossed it into the smal hole. In the same second, he leaped up beside me. The boom of the explosion shook the whole street. Lights started going on around the corner. â€Å"Wel done,† I said. â€Å"Thanks for your help. Back to Riley's?† I frowned. Riley's house was the last place I wanted to spend the rest of my night. I didn't want to see Raoul's stupid face or listen to the constant shrieking and fighting. I didn't want to have to grit my teeth and hide out behind Freaky Fred so that people would leave me alone. And I was out of books. â€Å"We've got some time,† Diego said, reading my expression. â€Å"We don't have to go right away.† â€Å"I could use some reading material.† â€Å"And I could use some new music.† He grinned. â€Å"Let's go shopping.† We moved quickly through town – over rooftops again and then darting through shadowy streets when the buildings got farther apart – to a friendlier neighborhood. It didn't take long to find a strip mal with one of the big chain bookstores. I snapped the lock on the roof access hatch and let us in. The store was empty, the only alarms on the windows and doors. I went straight to the H's, while Diego headed to the music section in the back. I'd just finished with Hale. I took the next dozen books in line; that would keep me a couple of days. I looked around for Diego and found him sitting at one of the caf tables, studying the backs of his new CDs. I paused, then joined him. This felt strange because it was familiar in a haunting, uncomfortable way. I had sat like this before – across a table from someone. I'd chatted casual y with that person, thinking about things that were not life and death or thirst and blood. But that had been in a different, blurry lifetime. The last time I'd sat at a table with someone, that someone had been Riley. It was hard to remember that night for a lot of reasons. â€Å"So how come I never notice you around the house?† Diego asked abruptly. â€Å"Where do you hide?† I laughed and grimaced at the same time. â€Å"I usual y kick it behind wherever Freaky Fred is hanging out.† His nose wrinkled. â€Å"Seriously? How do you stand that?† â€Å"You get used to it. It's not so bad behind him as it is in front. Anyway, it's the best hiding place I've found. Nobody gets close to Fred.† Diego nodded, stil looking kind of grossed out. â€Å"That's true. It's a way to stay alive.† I shrugged. â€Å"Did you know that Fred is one of Riley's favorites?† Diego asked. â€Å"Real y? How? † No one could stand Freaky Fred. I was the only one who tried, and that was solely out of self-preservation. Diego leaned toward me conspiratorial y. I was already so used to his strange way that I didn't even flinch. â€Å"I heard him on the phone with her. â€Å" I shuddered. â€Å"I know,† he said, sounding sympathetic again. Of course, it wasn't weird that we could sympathize with each other when it came to her. â€Å"This was a few months back. Anyway, Riley was talking about Fred, al excited. From what they were saying, I guess that some vampires can do things. More than what normal vampires can do, I mean. And that's good – something she's looking for. Vampires with skil zzz.† He pul ed the Z sound out, so I could hear how he was spel ing it in his head. â€Å"What kinds of skil s?† â€Å"Al kinds of stuff, it sounds like. Mind reading and tracking and even seeing the future.† â€Å"Get out.† â€Å"I'm not kidding. I guess Fred can sort of repel people on purpose. It's al in our heads, though. He makes us repulsed at the thought of being near him.†

Wednesday, October 23, 2019

Case Analysis for Virgin Mobile Essay

VIRGIN MOBILE USA – ‘FIRST PRICE’ STRATEGY (An analysis of the Pricing Decision alternatives that Virgin has to undertake to create an alternate customer segment and monetize their buying power)VIRGIN XTRAS – OVERVIEWThe Virgin Mobile USA service involved content, features and entertainment, called â€Å"Virgin Xtras†.Collaboration with MTV networks as it was the most recognized youth brands in the country and unparalleled reach forthe under-30 market segment: Exclusive, multiyear content and marketing agreement. MTV network to deliver music, games and other MTV-, VH1-, and Nickelodeon based content to Virgin Mobile subscribers. Subscribers would have access to MTV- branded accessories and phones, graphics, ring tones, text alerts and voice mails. Promotional airtime on MTV’s channels and website. Virgin mobile subscribers to vote for their favorite videos on a few MTV shows.Other Virgin Mobile services that aimed to appeal to the youth market , generate additional usage and create loyaltywere: Text Messaging Online Real- Time Billing Rescue Ring Wake- Up Call Ring Tones Fun Clips The Hit List Music Messenger MoviesTraditional Channel Virgin’s ChannelServices sold at own proprietary retail outlets, kiosks in Services sold where youth shop especially consumermalls, high-end electronic stores, speciality stores etc. electronic goods in stores like Target, Sam Goody music stores, Best Buy. High-touch sales people who were paid high sales Products packaged in consumer electronics packaging, placedcommission to ensure hands-on service. on a bright red clamshell, which gave it visibility and no salesperson was required.Cost per handset from Nokia, Motorola, Samsung etc. – Cost per handset from Kyocera- $60-$100. Lesser subsidy$150-$300. Entailed substantial subsidy from the entailed by the company.handset makers, a component of acquisition cost.Distributors’ industry avg. Commission- $100/phone Distributors commission- $30/phone.The availability of the phones were not as segment Phones available at 3000 retail outlets in USA, and availabilityspecific as Virgin targeted included at retailers such as Sam Goody, Circuit City, Media Play, Virgin MegastoreBilling is monthly Billing is to be real-time and with online avenues PRICING DECISIONS:-CUSTOMER PERSPECTIVESThe company tried to distinguish itself from the competitors standpoint by playing on the fact that t he targeted segment‘did not trust  the prevalent pricing points’ in the industry that hinged on the credit worthiness . The main practicesprevalent were:- 90% of all subscribers had contractual agreements for a period of 1 year-2 years Required rigorous credit check Plans established â€Å"buckets† of minutes, on extra usage users penalized heavily. Charged less for off-peak than on-peak minutes, but the off-peak period had shrunk. An additional fee was charged to add to the monthly bill, which included taxes, service charges. Per minute Charge (Y-axis, in cents) for the bucket of minutes contracted (X-axis) 180 160 140 120 100 80 Per minute Charge for the bucket of minutes andcontracted (X-axis) 60 40 20 0 0 20 40 60 80 100 120 140The bold line represents the cost per minute charged for a valid contract (which is shown by the arrows). The higher costin the vent of under-utilization of the contract is due to the high fixed cost (like the subsidization of hand sets,, contractcharges etc.)The higher limit in the vent of exceeding the contract is due to penalizing.PRICING DECISIONS – COMPAN Y PERSPECTIVESVirgin Mobile USA had to fix all these problems prevalent in the industry while taking a pricing decision. The mainconstraints it faced was that the prices should be competitive and profitable without triggering of competitive reactions.There were 3 options available:OPTION 1- ‘Clone the Industry Prices’ The message would go to customers that they were priced competitively with few advantages like differentiated applications [MTV] and superior customer service. Better off-peak hours and fewer hidden fees would be the selling point but the total pricing structure would still depend on off-peak and peak categorization as well as contacted minutes. Easy to promote as this strategy of â€Å"buckets† was already prevalent in industry. But risks alienating the target base as they already did not make the required cut for the credit worthiness. OPTION 2- ‘Price below the Competition’ Similar pricing structure as rest of industry, with actual prices slightly below those of competition only within the highest frequency range. Better off-peak hours and fewer hidden fees could also be given.OPTION 3- ‘A Whole New Plan’ Entirely different pricing structure. Eliminate contracts and going for prepaid pricing structure. However the nature of the American cellular market with operator dedicated handsets ad prohibitive pricing followed by the competitors due to high churn rates Cost of Acquisition Subsidization of Advertisement Sales handsets . Break even analysis and Life  time Value for cellular subscribers:- As already, stated in the current scenario, most mobile companies amass working capital by going for long term contracts. Compared to a US$ 100 acquisition cost for a prepaid connection, the equivalent historical cost of acquisition for a post paid consumer is US $ 370. Assuming that we stay with the post paid plan due to industry imperatives, we find that the average calling rate is around 10-30 cents per minute for a average bucket usage of 100-300 minutes (this is the target usage range that Virgin is aiming to target in the second option) Hence, average cost incurred by the company for a customer = US$ (0.1 x 300) =US$ 60 (The most promising aspect in the relevant range) Acquisition cost = handset subsidy given to hand set manufacturers (US$ 60 -100) + advertisement costs ( US$60 million budget spread over an estimated 1 million subscribers = US$60)+ sales overheads (US$100-150) = US$ 290-370 per user per month. Now, Breakeven point in terms of month is calculated as:- Total fixed cost = US$ 370 (acquisition cost for a post paid customer) = 28.46 months Revenue – Variable cost US$ 57 (avg. revenue per month from a user- ARPU) – US$30Hence it takes around 29 months for the customer to prove profitable for the company even in the most promisingscenario of the relevant range.But we will also have to induct the churn rate of around 2% per month into this optimistic consideration and try tocalculate the LTV. If the LTV is positive then the company should go ahead. The option that yields the largest LTV shouldbe chosen.LTV = ∑ (Ma).r(a-1) – Acquisition cost (1+i)a View slide Here, the margin remains relatively fixed across the periods which can be assumed as a modest 12%, r is the retentionrate which comes to around 72% (churn rate of 2% p.m. compounded monthly over a year = 1.02Ãâ€"1.02x†¦..till 12months ), i becoming interest rate assumed to be around 5%Margin in a month = (Average monthly phone bill ∞,=US$52)-(Cash cost per user =US$30) = US$22Now taking this value of n we have :- LTV = M/(1-r+i)Now calculating the LTV for every option available will give us a marker of how the pricing strategy should be used forusing various options considering the fact that the interest rate remains constant at 5%:-For option 1:-LTV = US$ {(22*12)/(1-0.72+0.05) } – 360= US$ 421For option 2:- Here the retention rate can be assumed to have been bettered by differential pricing in the 100-300minutes usage category , so we can assume a modest increase to 80%. But this is more or less offset by the increase incash cost to user which  can be assumes to rise by 5% if the differential pricing is 5% below the average industrystandard. So the margin can be assumed to drop to US$19. Here, LTV = US$ {(19*12)/(1-0.8+0.05) } – 360= US$ 489Hence we can see that even with modest assumptions, the LTV is maximized for Option 2, henca the company shouldventure into differential pricing if at all it wants to deviate. But considering the high acquisition turnover time andrecovery time of almost 29 months, it is a risky strategy because of very high mobility in the targeted segment.Hence Virgin should focus on non price factors such as :- If the contracts are done away with, this will ensure more loyalty of the target segment as the majority of them are not credit worthy. The positioning of Virgin Mobile USA and its collaborations with partners like MTV will attract more customers which are loyal. The cost of acquisition of a customer comprises of advertisement, sales cost and subsidy given. Since these costs are much lower than the other competitors, they can price themselves lower than competitors. They can also be transparent in their cost structure, eliminating hidden costs .Hence, initially it should give non-price advantage to its customers and over a period of time can reduce costs to sustaingrowth and drive off competition virgin mobile Presentation Transcript We Answer To A Higher Calling Prepared By – Team 4 Pooja Gupta (P122033) Rohit Singh (P122038) Saurabh Singh (P122041) Varun Anand (P122049 Virgin Groupâ€Å"Virgin believes in making a difference. We stand for value for money, quality, innovation, fun and a sense of competitive challenge. We strive to achieve this by empowering our employees to continually deliver an unbeatable customer experience.† Virgin Mobile USA†¢ Commenced operations in June, 2002†¢ Led by founding CEO Dan Schulman†¢ Entered USA as a 50-50 joint venture between Virgin Group and Sprint Corporation. Virgin Mobile USA’s service would be hosted on Sprint’s PCS network†¢ Sprint was in process of updating its network and increasing its capacity. View slide Virgin Mobile USA†¢ Schulamn- â€Å"The nice thing about this model is that we don’t have to worry about huge fixed costs or the physical infrastructure. We can focus on what we do best-understanding and meeting customer needs.†Ã¢â‚¬ ¢ â€Å"We Answer To A Higher Calling†Ã¢â‚¬ ¢ Providing extra-ordinary services and experiences at a low price as $35 View slide Objective†¢ Create value and profitability in cell  phone service industry†¢ Target market ages 15-29, opportunity for growth with this market segment†¢ 1 million subscribers by year 1, 3 million by year 4†¢ â€Å"By focusing on the youth market from the ground up, we’re putting ourselves in a position to serve these customers in a way they have never been served before† -Dan Schulman, CEO, Virgin Mobile USA 4P’s of Virgin Mobile USAWhy? Problem with Current Telecom Services†¢ Low penetration among consumers aged 15-29. Growth rate for this segment was projected to be robust for the next 5 years†¢ Target group had been undeserved by existing carriers and specific needs that haven’t been met†¢ Average monthly cell phone bill – $52 representing 417 minutes of use. Hence, cost to serve a customer – $30†¢ Carriers tended to be wary of acquiring low- value subscribers Target Group and Behavior†¢ Consumers aged 15-29†¢ Calling pattern is different from typical business person†¢ Open to new things: – Text messaging – Downloading information using cell phones – More likely to use: ringtones, faceplates and graphics †¢ It’s a fashion accessory and a personal style statement Mobile Penetration by Age Group Revenue from Mobile Entertainment Services Pricing Trend in US before Virgin†¢ Over 90% of all subscribers had contractual agreements for a period of 1-2 years with their cellular providers†¢ Customers would sign up for ‘buckets of minutes’†¢ If a user used more than allocated minutes, they would be charged with extremely high rates (eg: 40 cents / minute)†¢ If a user used less than allocated minutes, they were still charged the fixed monthly fee, which drove up their price per minute Calling Plans – Industry PricesPrice per minute Contract Commitment – Minutes Calling Plans – Industry PricesPrice per Minute Contract Commitment – Minutes Pricing Trend in US before Virgin†¢ Carriers charged less for off-peak than on-peak minutes†¢ Off-peak time changed from 6:00 PM to 7:00, 8:00 and then finally 9:00 PM†¢ Some carriers charged a monthly fee (appox. $7) to move the peak time back to one hour†¢ Carriers added additional fees to monthly bill (tax or other additional cost information was not communicated. So a $29 plan ended up being a $35 plan) What Virgin focused on?†¢ Customers couldn’t predict their usage and ended up choosing  wrong plan pattern†¢ Customers think they use more minutes than they actually use†¢ Target segment actually used 100-300 mins/month but target predicted their usage is higher than that†¢ People tried picking up lower bucket plans to avoid high monthly fees but they ended up paying a lot more than that due to usage of minutes above the bucket†¢ On-peak and off-peak minutes weren’t in right mix 4P’s of Virgin Mobile USAWhat? What to provide them? VirginXtras†¢ Delivery of content, features and entertainment†¢ Signed a exclusive and multiyear, content & marketing agreement with MTV networks to deliver music, games and other MTV, VH1 and Nickelodeon based content to Virgin Mobile Subscribers†¢ Deal with MTV also ensured airtime on MTV’s channel and web site VirginXtras†¢ MTV-branded accessories and phones and contents (ringtones, text alerts and voice mails†¢ To vote for their favorite videos on MTV’s shows like â€Å"Total request Live†Ã¢â‚¬ ¢ Text messaging – No. of text msgs tends to skyrocket during school hours. Reason: Parents don’t see who they call, private form of communication VirginXtras†¢ Online Real-Time Billing – No call detail on monthly bills. Website will record individual calls on a real-time basis†¢ Rescue ring – Mobile subscriber will get a call at prearranged time to â€Å"escape† in case a date was not going well .†¢ Wake-up Call – Chance to wake up to original messages from a variety of cheeky celebrity VirginXtras†¢ Ring Tones – Customized ringtones would be available for subscribers to download†¢ Fun clips – News, tidbits, jokes, gossip, sports and more†¢ Hit List – Vote top 10 list of hit songs. Would be able to hear the %age of other subscribers who either â€Å"loved it† or â€Å"hated it† VirginXtras†¢ Music Messenger – Tap into 10 songs list & forward it to a friend allowing them to check out a hot new track†¢ Movies – Movie descriptions, show timings, and buy tickets in advance Handset: First 2 basic models named â€Å"Party Animal† and â€Å"Super Model† came with interchangeable faceplates decorated with eye-catching colors and patterns 4P’s of Virgin Mobile USAHow? Virgin’s Goal†¢ To make sure their prices are competitive†¢ To make sure they could make profit†¢ Don’t want to trigger off competitive reactions Options†¢ Clone the Industry Prices†¢ Price Below Competition†¢ Whole New Plan Clone the Industry Prices†¢ Use same prices as other competitors†¢ Communicate  -â€Å"priced competitively with everyone else but with a few key advantages like differentiated applications (MTV) and superior customer service† – MTV Applications and features – Superior Customer service†¢ Offering better off-peak hours and fewer hidden fees†¢ Put on packaging so that even without a salesperson, consumers would get the message Price per minute Contract Commitment – Minutes Clone the Industry Prices Price Below the Competition†¢ Maintain buckets and volume discounts†¢ Set price per minute below the industry average for certain key buckets – Target young market 100-300 mins Price per minute Contract Commitment – Minutes Price Below the Competition A Whole New Plan†¢ Shorten or Eliminate Contracts – Contracts guarantee annuity stream – Contract allows 18 years or below to purchase the product – Churn rate was 2%, new plan could increase churn rate to 6%†¢ Prepaid service – 92% US subscribers had Post-paid – Pre-paid was used on occasional basis as rates per minute was high and no credit check was required – Has high churn rates. Company would never be able to recoup its customer acquisition costs – New mechanism or infrastructure was required for prepaid services A Whole New Plan†¢ Handset subsidies – Mobile carriers subsidized the cost of handset to end users to acquire customer cost†¢ Eliminate Hidden Fees and off-peak hours – ‘what you see is what you get’ – Rolling out hidden costs into pricing such that pricing feels competitive – off-peak should benefit the target group. Minute usage is very different from busines s class Price Below the Competition What they did?†¢ LTV Model – Life Time Value†¢ In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or user lifetime value (LTV) is a prediction of the net profit attributed to the entire future relationship with a customer†¢ Simplified Model†¢ LTV = (M/(1-r+i)) – AC Factors influencing LTV†¢ ARPU: Avg Revenue Per User†¢ CCPU: Cash Cost per User = 45% of ARPU†¢ M: Monthly Margin = ARPU – CCPU†¢ r: Retention rate ( 1 – (12*6%)) = 0.28†¢ AC: Acquisition Cost ( = $120 for Virgin) – Sale commission – Advertising per gross add – Subsidy cost LTV Calculation†¢ LTV = (M/(1-r+i))  Ã¢â‚¬â€œ AC†¢ => M = ARPU – CCPU = (1 – 45)% = 55%M on yearly basis, assuming that a customer talks for 200mins. M = (1-0.45) * 200 * 12 * p p -> can be 5 – 30 cents/min (As competitors are charging more than 30 cents/min LTV @ Different Price Points†¢ LTV(at 5 c ents)= (1-.45) (200*12*.05) /(1-.28 + .05) – 120 = -34.28†¢ LTV(at 7 cents)= (1-.45) (200*12*.07) /(1-.28 + .05) – Break-even120 = 0 point†¢ LTV(at 10 cents)= (1-.45) (200*12*.1) /(1-.28 + .05) – 120 = 51.42†¢ LTV(at 15 cents)= (1-.45) (200*12*.15) /(1-.28 + .05) – 120 = 137.14†¢ At 7 cents, the LTV =0 which tells that minimum of 7 cents should be charged by the virgin†¢ Virgin can charge any amount more than 7 cents LTV @ Different Price Points Price Point LTV5 cents / minute -34.287 cents / minute 010 cents / minute 51.4215 cents / minute 137.14 Break-even point Current Plans in Market Company Plan ValueAT&T Starting at $40/monthVirgin Mobile USA $35T-Mobile $34.99 (Only talk + text) other plans starting at $59.99 Providing a plan with music and other added features Virgin’s Service Offering†¢ Extra features: Music, Wallpapers, Videos, Live Video Request, Rescue ring, wake-up call facility†¢ New improved billing pattern and online real-time monthly bills†¢ Prepaid plan†¢ No contracts†¢ No hidden charges†¢ No peak off peak hours†¢ Very low handset subsidies†¢ No credit checks†¢ No Monthly bills†¢ Price: 25 cents per minute for the first 10 minutes; 10 cents/minute for the rest of the day†¢ No exact numbers, but churn rate lower than 6% Conclusion†¢ Virgin correctly identified service gaps in telecom industry and what customers needed.†¢ Virgin identify inflexibility in calling plans and in other plans.†¢ Provided extra services than current mobile carriers.†¢ Provided a medium of entertainment on go.†¢ Offered customized services at a relatively low cost. References†¢ HBR case study â€Å"Virgin Mobile USA: Pricing for the Very First Time†Ã¢â‚¬ ¢ Wikipedia.com