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 organizations,

and the service sector is no exception. Recent experience of the UK's largest

telecommunications company, Della's, 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 is easy to see why buyers sought a way of

simplifying their buying process. Throughout the 1990s, Della's had positioned its UK

network as superior technically to its competitors. Advertising focused on high coverage rates

and call reliability.

Della's 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 1985 and was the market leader since 1986. Della's networks in

the UK - analogue and digital - between them carried over 100 million calls each week. It

took Della's more than 13 years to connect its first three million subscribers but only 12

months to connect the next three million. Della's 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, Della's was aware that although it was recognized 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 Della's for essentially rational

reasons rather than having any emotional attachment to the brand. The success of the

competing Digital network, which had developed a very strong image, was a lesson to Della's

that many people did not understand many of the product features on offer, but instead

identified with a brand whose values they could share. Della's recognized that it needed to be

perceived as adding value to a consumer's lifestyle. Given the increasing complexity of

product features, positioning on technical features was likely to make life more confusing for

personal customers. An alternative approach was needed which focused on image and

lifestyle benefits.

QUESTION

Critically analyse the information provided on Della's position in the market, and design a

marketing plan to strengthen Della's visibility and their competitive advantage. Be sure to

identify the principal benefits of your proposed marketing strategy. You are also required to

design a promotional plan that would effectively capture your target market.