Marketing Case Study with Questions and Answers

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CHAPTER 13: THE MARKETING OF SERVICES
ADDITIONAL CASE STUDY

NEW LINE IN MOBILE PHONES

One of the oldest principles of marketing is that sellers may sell features, but buyers essentially buy benefits. This is a distinction sometimes lost on technology led organisations, and the service sector is no exception. Recent experience of the UK’s largest telecommunications company, Vodafone Airtouch, illustrates how crucial it is to see service offers in terms of the benefits they bring to customers. The company was aware of extensive research which had found high levels of confusion among purchasers of mobile phones, with a seemingly infinite permutation of features and prices. With four main networks to choose from, dozens of tariffs and hundreds of handsets, it easy to see why buyers sought means of simplifying their buying process. Throughout the 1990s, Vodafone had positioned its UK network as superior technically to its competitors. Advertising focused on high coverage rates and call reliability.

Vodafone was the UK's most popular mobile phone operator, with almost eight million customers, including 4.2 million Pay as you Talk customers. It had opened the UK's first cellular network on 1 January 1985and was the market leader since 1986. Vodafone's networks in the UK - analogue and digital - between them carried over 100 million calls each week. It took Vodafone more than 13 years to connect its first three million subscribers but only 12 months to connect the next three million. Vodafone had the largest share of the UK cellular market with 33% and had more international roaming agreements than any other UK mobile operator. It could offer its subscribers roaming with 220 networks in 104 countries.

Despite all of the above, Vodafone was aware that although it was recognised as an extremely strong business in the corporate marketplace, it was not so strong in the market for personal customers. Research indicated that personal buyers bought Vodafone...
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