CASE STUDY 2

Features | Benefits | Products | Services

Submitted to:
Mr. Kumaran Raman
Acting Postgraduate Coordinator & Senior Lecturer
Faculty of Business & Law
ASIA METROPOLITAN UNIVERSITY
Tel: 03-9080 5888 Ext 680
02nd June, 2016
A.HARIS AWANG

MBA2016-04-1001

MBA 6033 Marketing Management

CASE STUDY 2: 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 UKs
largest telecommunications company, Vodafone, 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 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 1985 and 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 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 Vodafone for
essentially rational reasons rather than having any emotional attachment to the brand.
The success of the competing Orange network, which had developed a very strong image,
was a lesson to Vodafone that many people did not understand many of the product
features on offer, but instead identified with a brand whose values they could share.
Vodafone recognized that it needed to be perceived as adding value to a consumers
CASE STUDY 2 | NEW LINE IN MOBILE PHONES | BY A.HARIS AWANG | PAGE 1

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.
The company decided to hire Identica the consultancy that originally created the One 2
One brand to revamp its brand communications and advertising strategy in an effort to
make Vodafone more appealing to personal customers. Identica created a new visual
language for the Vodafone brand. Vodafone became involved in the biggest ever TV,
press, poster and radio advertising campaign in its 15 year history. Employing a
completely new style, the new advertising centered around the theme: 'You are now truly
mobile. Let the world come to you' and featured a new end-line - Vodafone YOU ARE
HERE. The campaign demonstrated how Vodafone's products and services were
designed to make life easier for its customers.
The campaign, created by BMP DDB, was worth 20 million over two months alone and
ran for the whole year. Bringing meaning to the Vodafone brand and what it represented,
a series of advertisements, through a range of media, showed how Vodafone let the world
come to its customers, enabling them to be truly mobile. This portrayed how Vodafone
always pioneered to make things more possible for its customers in a wire-free world.
In press and poster executions, Vodafone used arrows photographed in various real life
situations to depict its flagship services, e.g. a weather vane was used to illustrate the
Vodafone Interactive weather service showing how weather information could be brought
to customers through their mobile. Each advertisement again had the Vodafone YOU
ARE HERE end-line. The arrows indicated the directional approach of Vodafone, letting
the world come to the customer. Other executions illustrated cinema listing information,
sports updates, share price information, international roaming and the Vodafone Personal
Roadwatch 1800 service.
The change in emphasis by Vodafone seemed to be timely. The mobile phone industry
was facing a new wave of confusing product features hitting consumers, with the
development of Wireless Access Protocol (WAP) phones and the newer Third generation
phones due to be launched in 2001. It seemed inevitable that all of the competing
CASE STUDY 2 | NEW LINE IN MOBILE PHONES | BY A.HARIS AWANG | PAGE 2

networks would be offering confusing permutations of features with their service, so

Vodafone calculated that, given similar levels of reliability and sophistication by all
networks, a favorable image and lifestyle association would be an important source of
competitive advantage. Given the right image with existing technology, there would be a
strong probability that consumers would migrate with the brand to the new technology
when it arrived.

CASE STUDY REVIEW QUESTIONS

1. Identify the principal benefits to customers which derive from a mobile phone. What
differences are likely to exist between market segments?
Answer:
Mobile phones, also known as smartphones in recent years, have become more than
just devices to make and receive calls. With the advent of mobile technology, they have
become a necessity and inseparable from businesses and individuals.
Principal benefits of a mobile phone to a customer are described as follows (Jung, 2016):
COMMUNICATION OPTIONS
Smartphones offer multiple ways of communicating. Users can access email like Yahoo!
Mail or Gmail which was only limited to PCs in the old school mobile phone days.
Communication is made easier by Whatsapp, WeChat or Telegram where in the old days,
only SMS texting was available. With front-facing cameras video calls are also possible.
Socializing through Facebook, Instagram, Twitter and LinkedIn have also been beneficial
to users.
WEB EVERYWHERE
Previously, users have to use PCs to access the Web. With smartphones, users can be
anywhere - train, bus, shopping mall, park or beach as long theres coverage.
Smartphones and internet technologies have become sophisticated to allow users to get
high speed and quality content like video streaming and gaming.
CASE STUDY 2 | NEW LINE IN MOBILE PHONES | BY A.HARIS AWANG | PAGE 3

DEVICE MERGER
Users no longer have to lug gadgets like laptops, tablets, GPS devices, cameras, MP3
players and cell phones all at once when traveling. Not only that, each gadget usually
requires a charger which may also be bulky and heavy. All that are now bundled into a
smartphone. That translates into cost saving and portability.
ENDLESS APPLICATIONS
Thousands of apps available today have made smartphones the essential gadgets to
businesses and individuals. Online banking transaction, fitness monitor, unit converter,
currency converter, Waze, internet TV, just to name a few are benefiting users. Users
have cut down time wasted on queuing up to pay bills or do banking thanks to
smartphones.
Benefits which derive from mobile phones vary from person to person. What customers
see as benefits depends on what value mobiles phones have to offer. Chatting or surfing
using mobile phones may be considered aimless and useless to some while enjoyable
and useful to others.
The differences likely to exist between market segments are for example, the degree of
importance of features depending on the value perceived by the users. Segments can be:
age, gender, occupation, income, lifestyle or demographics. Different segments may have
different needs and marketers must identify which features or benefits suit which segment
for successful marketing.
Depending on how mobile phone companies would want to segment their market, a
typical mobile phone market should be segmented into work-oriented customers, highly
social customers, and customers who consider mobile phones as a status symbol. Highly
social customers would expect mobile phones to be durable, technologically advanced,
and easy to use. Work-oriented customers would prefer buying phones that are
inexpensive and durable. Mobile phones are considered as a status symbol by many
people. They expect their phone to be technologically advanced, expensive, sleek, and
stylish. (Mello, 2014)
CASE STUDY 2 | NEW LINE IN MOBILE PHONES | BY A.HARIS AWANG | PAGE 4

2. Is a strong brand identity on its own a source of sustainable competitive advantage?

To what extent must this be backed up by real product features?
Answer:
A strong brand identity on its own can be a source but does not guarantee sustainable
competitive advantage. It has to be backed up by real product features to the extent that
they satisfy customers needs and wants.
Take for example, Blackberry by Research in
Motion (RIM). Yesterday, it was the phone
brand embraced by many enterprises and even
being spotted in the hand of President Obamas.
Today, it is reduced to almost non-existence with
a barely noticeable market share of 0.2%
(Haselton, 2016). Blackberry phones were
focused and targeted at enterprises while
ignoring the individual market segment. The
launched of Apples iPhone has changed the
game. Despite the introduction of the Z10 and
the Playbook, Blackberry was a little too late to
respond in order to survive.
iPhone on the other hand was packed with real features that customers wanted. For
example, the capacitive touch screen really makes the smartphone easy to use instead
of having the physical QWERTY keyboard and a track pad that sacrifice the screen size
by nearly half. People who switched from Blackberry to iPhone are less likely to switch
back to Blackberry for this reason. (The national, 2013)
It is also worth mentioning other strong brands that went into the oblivion Nokia,
Compaq, Polaroid, Kodak which just proves the point that strong brand on its own does
not guarantee sustainable competitive advantage.

CASE STUDY 2 | NEW LINE IN MOBILE PHONES | BY A.HARIS AWANG | PAGE 5

3. Are goods different to services in the way that a distinction is made between features
and benefits?
Answer:
Yes, they are all distinctive. First, lets have a look at how distinct features and benefits
are from each other.
Features are what product or service enables customers to do. They are characteristics
that a product or service does or has. They are usually advertised alongside a product or
service to give customers an idea of what it can do (see figure 3.1). Features such as
megapixel, lens type or Wi-Fi can help customers make the purchase decision. When
products or services can be conveniently compared with competitors, consumers are
more likely to choose products or services with the most features. For example, a digital
camera that offers Wi-Fi as an additional feature compared to a competitors of the same
class will most likely be chosen.
Figure 3.1. An example of products & features on a website. (Source: canon.com.my)

Benefits are the outcomes customers get that help them achieve their objectives. Benefits
also help in solving customers problem. A benefit answers the question "What's in it for
me?," as it provides the customers with something of value to them. Benefits are the
reasons customers buy the product or service. Benefits are results customers get by
CASE STUDY 2 | NEW LINE IN MOBILE PHONES | BY A.HARIS AWANG | PAGE 6

using the features. Benefits can also masquerade as features. They are used to enticed
customers into buying the products or services. As in the example of figure 3.1, each
features benefit is not clearly shown. Customers somehow have to go deeper to look for
what each feature is about which normally leads them to the benefits. Features can also
imply benefits as they convey a subtle message as to why one would want to use a certain
product. For example, Coca-Cola has introduced Diet Coke, an alternative to the regular
Coke that is low in sugar and less calories. Even though not stated, consumers who
consume Diet Coke know that these features give them the weight loss benefit. So not all
benefits are clearly spelled out in advertisements. As in the example below (fig. 3.2), Diet
Coke is associated with skinny celebrity, Taylor Swift, that conveys the benefit that is very
subtle drink Diet Coke if you want to lose weight.
Figure 3.2. An example of a products benefit associating Taylor Swift & Diet Coke. (Source:
google.com)

CASE STUDY 2 | NEW LINE IN MOBILE PHONES | BY A.HARIS AWANG | PAGE 7

From examples in Tables 3.1 and 3.2, we can see that benefits are derived from features
of products or services. Marketers have to understand the difference in these two
definitions for successful marketing.
Table 3.1. An example of features and benefits of a product.

Product

Features

Benefits

Digital Camera

12MP CMOS sensor

Instant sharing so users can upload to

social media

24-120mm lens

Great for family, portrait and

landscape

ISO 80-12800

For low lighting condition e.g. indoor,

night, overcast

Built-in Wi-Fi

Sharing on internet

RAW format recording

Good for advanced post-editing

Table 3.2. An example of features and benefits of a service.

Service

Features

Benefits

Uber Taxi

Cashless

No worries about carrying cash or

paying exact change

Apps driven

Order the ride at fingertip. Can see

drivers picture. Can map the ride.

Cars less than 5 years

Ride and safety is ensure with new

cars

Door-to-door

Dont have to walk far to get a taxi

Fare estimate in advance

Less likely conned or overcharged

CASE STUDY 2 | NEW LINE IN MOBILE PHONES | BY A.HARIS AWANG | PAGE 8

Secondly, products and services are also distinctive as described below.

Kotler & Keller (2012) defined products as anything that can be offered to a market to
satisfy a want or need and services as any act or performance that one party can offer to
another that is essentially intangible and does not result in the ownership of anything.
Products are tangible, which means they exist in physical form. Customers can touch,
feel or in the case with online products, see before they could decide to purchase.
Examples of products are:

Computer

Smartphone

Automobile

Food

House

Camera

Services are intangible, which means they exist as an act or performance to satisfy
customers needs. A service may also be a business derived from a product. For example,
an automobile is a product that requires services at a later stage.
Examples of services are:

Consultation

House cleaning

Haircut

Car service

Security

Airline

CASE STUDY 2 | NEW LINE IN MOBILE PHONES | BY A.HARIS AWANG | PAGE 9

Table 3.3. A comparison between products and services.

Products

Services

Tangible

Intangible

Ownership

Non-ownership

Have immediate value

Have value when used

Quality easily measured

Quality not easily measured

Transferable

Non-transferable

Can be inventoried

Cannot be inventoried

CASE STUDY 2 | NEW LINE IN MOBILE PHONES | BY A.HARIS AWANG | PAGE 10

REFERENCES
Douglas, L. .C. (2000). Marketing Features Vs Benefits. Retrieved 2 June, 2016, from
https://www.entrepreneur.com/article/34942
Haselton, T. (2016). TechnoBuffalo. Retrieved 1 June, 2016, from
http://www.technobuffalo.com/2016/02/18/mobile-os-market-share-gartner/
Jung, B. (2016). Chroncom. Retrieved 1 June, 2016, from http://smallbusiness.chron.com/benefitssmartphone-technology-57037.html
Kauffman foundation. (2015). Product/Service Features and Benefits. Retrieved 2 June, 2016, from
http://www.entrepreneurship.org/resource-center/productservice-features-and-benefits.aspx
Kotler, P & Keller, K.L. (2012). Marketing Management. (14 ed.). US: Prentice Hall.
Lorette, K. (2016). Product Vs Service Marketing Challenges. Retrieved 2 June, 2016, from
http://smallbusiness.chron.com/product-vs-service-marketing-challenges-658.html
Mello, J. (2014). Walkmecom. Retrieved 1 June, 2016, from
http://product2market.walkme.com/benefit-segmentation-examples/
The national. (2013). The Bottom Line: What happened to BlackBerry?. Retrieved 2 June, 2016, from
https://www.youtube.com/watch?v=ppLIRdUezug

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