In the Understand Zone, Robin de Rooij, Senior Research Manager from SKIM, joined Frank Smidt, Senior Proposition Marketer & Portal Manager at Vodafone NL, to present a joint case study on how SKIM’s market research approach enabled Vodafone NL to test the market for a big change to its fixed line offering proposition prior to launch. Vodafone NL positions itself to be “Always Easiest”, favoring simplicity over freedom of choice for mobile data, as can be seen in its hugely successful RED mobile line-up. However, as fixed phone lines become redundant and TV services evolve, consumers are starting to demand freedom of choice over simplicity. Vodafone designed its fixed line-up to offer consumers more freedom of choice, which conflicts with its positioning of simplicity. It needed to test its market proposition potential of offering more freedom of choice vs simplicity. The joint session highlighted how SKIM’s research approach provided Vodafone NL with a clear indication of consumer choice.

1. Freedom of
choice
Presenters:
Frank Smidt, Vodafone
Robin de Rooij, SKIM

2. Small Medium Large
€ 30 € 45 € 60
50 mb/s
50 TV channels
9 ct p/min
100mb/s
100 TV channels
Unlimited fixed
500mb/s
150 TV channels
Unlimited
Predefined package / Old Vodafone fixed line-up
Vodafone NL offered predefined packages in the fixed telecom market. Although these were easy to understand,
they did not give much freedom for prospects to customize to their own needs.

3. Fixed market
PREDEFINED
PACKAGES
PREDEFINED
PACKAGES
Although competition was fierce, most competitors were offering very similar predefined packages. As the main
parameters are similar across brands, differentiation mainly occurred on brand, price and promotions.

4. FREEDOM
OF CHOICE?
Fixed market
PREDEFINED
PACKAGES
PREDEFINED
PACKAGES
FREEDOM
OF CHOICE?
As a challenger in the fixed market, Vodafone needed to set itself apart and offer something different. The product
team considered offering a portfolio with more flexibility for prospects to customize the product to their own needs.

5. 50 mb/s 100 mb/s 500 mb/s
50 TV channels 100 TV channels 150 TV channels
9 ct p/min Unlimited fixed Unlimited
Freedom of choice
If Vodafone could offer this type of line-up, prospects could choose the most suitable option for each service
individually. A risk to such a portfolio is that as prospects optimize their product, average spending may decrease

6. What is the
ideal portfolio
structure?
Sales &
revenue impact
for Vodafone?
In order to be able to perform such a drastic change to the portfolio, including all the required changes to IT
systems, etc. Vodafone needed strong evidence that a portfolio with Freedom of choice would truly perform better,
both for Vodafone and for consumers in the market. To do so, they came to SKIM with these two research
objectives.

7. Predefined packages Freedom of choice
We needed to understand and quantify consumer preferences for the two portfolios. The first, and easiest step,
was to measure preference for the portfolio as a whole.

8. Predefined packages Freedom of choice
To do so, we simply asked prospects to choose which of the two portfolios would be more attractive to them, and
to explain the reason for their preferences.

9. Predefined packages Freedom of choice
However, that’s not the full story, as consumers do not choose for a portfolio, they choose for a specific product
option within the portfolio.
As the Vodafone team had hoped, we saw a preference for the Freedom of choice portfolio.

10. Predefined packages/ Total € 45,- Freedom of choice/ Total € 35,-
As mentioned, a potential danger of the
Freedom of choice portfolio was that
consumers could optimize the product to
their own profile, leading to lower spending,
negatively impacting Vodafone revenues.
We saw this effect as we asked prospects to make specific choices within each portfolio. For example, with
predefined packages, those who wanted medium internet speed had to choose for the middle option. In the
Freedom of choice portfolio, some of these people could reduce their spending considerably by choosing cheaper
TV and phone options.

11. Predefined packages/ Total € 45,- Freedom of choice/ Total € 45,-
However, we also saw another effect occur. Some prospects who would prefer to have the very fastest internet
connection did not choose for the most expensive predefined package, as this would be too expensive. However,
with Freedom of choice, they were willing to pay the price premium for internet, as they were not forced to also
pay for a larger phone and TV bundle.

12. € 45,- € ??,-
Predefined packages Freedom of choice
The Freedom of choice portfolio caused prospects to choose more extremely, using both the bottom and the top of
the product offer. Both effects impacted average spending in the new situation, which we will not disclose in this
online document for confidentiality reason.

13. Freedom of choice
To really understand how the portfolio change would impact Vodafone though, we need to look further. Vodafone
does not exist in isolation, and at SKIM, we always try to take into account the full context of consumer decisions.

14. Freedom of choicePredefined packages Predefined packages
The big questions was of course: “Can this new portfolio really convince more people to choose for Vodafone?”
To measure the impact of a portfolio change for Vodafone, we need to ask prospects to make realistic choices
between Vodafone and its competitors, each with its own product offer.

15. Freedom of choice
• Using our simulation model, Vodafone was
able to test different possible ‘Freedom of
choice’ product lines in competition and
determine what their impact would be on sales
shares.
• As we know which prospects would choose for
Vodafone in context of its competition and we
know the expected spending for these
prospects, we can also get a reliable revenue
estimate with this simulation model.
For confidentiality reasons, we can not disclose
forecasts on shares and revenues for Vodafone in
this online document.
Sales potential Revenue potential

16. Freedom preferred?
Freedom higher spending?
Freedom higher shares?
Freedom higher revenues?
Summing up, in this research we were able to evaluate the new product portfolio for Vodafone
on a number of criteria, so they could make a well-informed decision on how to proceed.

17. FREEDOM
OF CHOICE?
The first results of the portfolio’s performance are promising and in line with SKIM forecasts.
The research gave Vodafone great insights into the performance of freedom of choice and enabled the team to
convince management to go ahead and introduce the new portfolio.

18. Drop by at our booth E261
to find out how to optimize
your portfolio
Presenters:
Frank Smidt, Vodafone
Robin de Rooij, SKIM