Vodafone Marketing Issues Assignment Example | Topics and Well Written Essays - 1000 words

Vodafone Marketing Issues - Assignment Example Proposal: From the above annexure, it is observed that sales, as well as the market capitalization of the organization, has increased in the past year owing to the advertising efforts taken up by the company from past 2007 in the Hong Kong as well as the other units. Out of the total revenues generated by the advertising companies, a 9% increase is attributed to the Vodafone advertising campaigns (Eaton. M, 2007). With the increase in the ad spends, the company could boost its sales of mobiles and network services so much that even though the Average Revenue per User (ARPU) has been reduced to its rock-bottom prices, the increased customer base improved the profitability levels of the company. As already known, due to the recessionary pressures in this year, the sales targets were cut down twice already. The company is gearing up to face the turmoil by cost-cutting measures. In this exercise, reports suggest that severe cut in the ad spend would be taken up as one such measure along with the other measures of job cuts and logistics. (Thiel. S, 2009). As already emphasized, ad spend is directly related to the increase in sales and customer growth, a cut in that expenditure may cause negative repercussions for the organization. Instead, if increase in the ARPU is considered commensurate to the industry levels, given the existing large customer base of 289 million customers (Anon. 1, 2008), more revenue can be generated per customer which could be utilized for the required ad spend thereby giving a scope for the growth of the customer base in the future also. Research conducted by the Mc. Kinsey and London Business School suggests that firms which reduce their ad spend during the worst of the times tend to lose both in the short and the long terms.