MKT5001 : Case Study – giffgaff - Marketing Fundamentals - BPP Business School

Overview: In late 2009 O2 created giffgaff, a SIM-only mobile network to attract an audience of digitally-savvy consumers who avoided traditional networks. Its defining characteristic was the application of the community-powered model. giffgaff is an old Scottish Gaelic word which means “mutual giving” and the name was chosen to fit with the principles outlined in the manifesto such as being member run, always listening to members and rewarding them in kind. This is a unique aspect of Giffgaff –its users also help out in operating the company in areas such as customer service, sales and marketing. Payouts are earned by recruiting and by helping other customers with their questions or technical problems, and can consist of £5 for each referral, converting payback to cash, airtime or a donation to charity.   giffgaff claims they are “the only truly unlimited packages” in the mobile market and have been developed in consultation with the growing giffgaff community “to bring simple and affordable packages to all – with no hidden costs or confusing small print.”   giffgaff have developed a strong corporate social responsibility ethos by donating profits to local and national charities.   Targeting:   giffgaff target various segments but primarily tech-savvy users who want great value and convenience from their mobile provider. giffgaff’s slogan is ‘the mobile network run by you’ giffgaff can afford to target a very specific niche of customers who are happy for their relationship to be conducted entirely online. The tone that giffgaff use to communicate with its customers is fun and informal. Customers are called members, to reiterate the community feel of the organisation.   Competition:   Competitors of giffgaff include Plusnet, iD Mobile, FreedomMobile and Talkmobile, along with the more traditional mobile phone providers including 3, EE, Vodafone and Virgin Media.   Marketing Issues and Challenges:   Despite the popularity of giffgaff, the organisation has been criticised with regards to the ethics and messages behind some of their offers and advertising campaigns.   After goodybags with unlimited internet allowance were introduced, complaints were made to the Advertising Standards Authority (ASA) from customers who had their internet access disabled. giffgaff noted that their customer service agents had used the clause incorrectly and promised to rectify this.   Various giffgaff advertising campaigns have received high levels of complaints from the public, including two adverts which were upheld by the ASA due to the harm and offense caused by them.   Marketing Fundamentals Coursework April 2017   The unique business model which giffgaff has adopted has proved to be popular with a specific segment of customers. As such, it is being replicated by competitors. This poses a challenge to giffgaff, as it may adversely affect their member base.   Product: At launch, the first product was a prepaid SIM card providing all standard 2G and 3G mobile phone services, charged on a pay as you use basis. After launch, bundles of minutes, texts and data, called "goodybags", were introduced. The idea for bundles emerged from the community forums. giffgaff later added data-only goodybags, called gigabags, to their line-up of products. From 2014 giffgaff announced that they were now an official Apple carrier and that they would also stock iPhones in their online shop – this would unlock options on iPhones that would have normally been locked for users, including tethering and voicemail options. New goodybags include 4G data as standard. Customers can choose the goodybag with the best mix of UK data, minutes and texts to suit them. There are no contracts to lock customers in, and flexibility is a key element of the product......