Virgin Mobile's research is timely and provides valuable insights that are contrary to conventional wisdom. Few expect that consumers would cut food expenses before cell phone spending. Yet a study sponsored by IDRC in rural Uganda suggests that women on very low incomes are willing to sacrifice both food and travel in order to purchase mobile air time, such is the premium that is placed on mobile phones. Virgin Mobile’s survey responses suggest that, as mature-market consumers become more price-sensitive due to the economic downturn, they are beginning to behave more like emerging-market mobile phone users. An affinity for pre-paid services, the perception of mobile phones as a necessity, increasing use of text messaging, and even choosing mobile phone service over groceries are all characteristics of the customer base in emerging markets.Companies that have conducted research and gathered data on consumer spending in emerging markets may be positioned to use that knowledge and expertise in developing strategies for weathering the current economic downturn. By understanding the spending habits, prioritization, trade-off decisions, and plan preferences of emerging-market consumers, companies will be better prepared to address the needs of more cost-conscious consumers in mature markets. If mature-market consumers are truly adopting the preferences and perceptions of emerging-market consumers, this is probably good news for the telecommunications industry. With cell phone connectivity increasingly perceived by consumers worldwide as a basic necessity, the mobile industry may not be as vulnerable as others during an economic downturn. Nevertheless, pre-paid services and other programs for price-sensitive consumers will be an advantage in a tough economic environment.
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