Starting in 1994, Pelephone Communications, owned jointly by Motorola USA and Bezeq, the state phone company of Israel, was feeling the heat from rival Cellcom. Although high-quality, high-service Pelephone products dominate Israel's business market, Cellcom was gaining in the country with a phone that costs a quarter of Pelephone's price. Benny Einhorn, Pelephone's vice president of marketing, was given the daunting task of developing a product that would go head-to-head with the cheaper competitor but still maintain his company's dominance in the high-end segment.
"The growth potential was in the wider consumer market," Mr. Einhorn, 41, explained. The product had to answer the demands of the consumer market but had to be a limited product so as not to cannibalize Pelephone's existing market. The solution: a new brand name that the public would differentiate from the Pelephone.
Mr. Einhorn first examined a type of voice pager that would receive only incoming calls. The market, he said, wasn't interested. The next idea was to allow the phone to call out to only one number but to receive calls from anywhere, thus making it attractive to parents who want to keep tabs on their kids but not give them, and all their friends, an open, expensive phone line. An additional feature was to allow users to make outgoing calls using the Bezeq Calling Card. The idea took, and the intial plan was to target the brightly colored phones to the youth market.
Pelephone ad agency Tamir-Cohen, of Tel Aviv, came up with the brand name Mango, a word that sounds and means the same in Hebrew and English. A final boost for the phone, added Mr. Einhorn, was selling it off-the-shelf in the Superpharm chain, which has 46 stores around Israel.
"This is the only true off-the-shelf cell phone in the world," said Mr. Einhorn, explaining that after the customers pay $230 for the phone, they have no further financial obligations to Pelephone because the one outgoing call number is billed via the land-line company Bezeq, and incoming calls are paid by the caller only.
With an initial advertising budget of $1 million and plans to utilize all media, Mango began rolling out in April. But 10 days after ads appeared in newspapers and on outdoor boards, the demand was so overwhelming that the first 30,000 phones in stock had disappeared off Superpharm's shelves. Mr. Einhorn was forced to cancel the TV and radio spots, cutting the projected advertising outlay in half.
The Mango's limitations on outgoing calls, noted Mr. Einhorn, turned into a selling point for a market beyond that of the targeted youth: Businesses saw the Mango as ideal for low-level workers who operate outside the office and need to keep in touch. This prompted an addition to the Mango family: Mango-Pro, a phone in a decidedly more professional dark blue color and with voice mail. Now, the two campaigns are running in tandem in newspapers and on outdoor boards and TV.
So far, the response has been staggering. Since their introduction up until late fall, 140,000 Mango phones have been sold, comprising 46% of the 300,000 new cellular phones sold in Israel in that period. Of a total 900,000 cellular phones in Israel today, 480,000 are Pelephone phones (including the Mango) and 420,000 are Cellcom phones.