EXTENDED ESSAY: BUSINESS AND MANAGEMENT
To what extent has the change in advertising
strategies helped Vodafone India Pvt Limited
increase brand awareness?
Candidate Name: Vidhatri Rathi
Candidate Number: 001940015
Session: May 2013
Word count: 3947
Vidhatri Rathi |2
CONTENT PAGE
Abstract
3
Acknowledgements
4
Introduction:
Company Background
5
Market Structure
5
Problem Background
7
Justification of Study
8
Objectives
10
Significance
11
Limitations
11
Methodology
12
Findings and Analysis:
SWOT Analysis
13
Porter‟s 5 Force Analysis
16
Cost Benefit Analysis
19
Advertising Elasticity of Demand
21
Conclusion
23
Bibliography
25
Supporting documents and appendices
27
Vidhatri Rathi |3
ABSTRACT
In the year 2007, Vodafone Group Plc bought 67% stakes in Hutchison Essar India, changing
“Hutch” to “Vodafone”. This required Vodafone to change its brand image, thus bringing us
to the question: “To what extent has the change in advertising strategies helped
Vodafone India Private Limited increase brand awareness?”
The introduction outlines the company and problem background, as well as the structure of
the wireless telecommunication market in India. It then lists the objectives of the study, along
with its limitations and justifications. The methodology used to conduct this research
included both primary and secondary research which are discussed in the Introduction.
Online surveys were conducted in order to understand the patterns in brand awareness of
Vodafone. Findings and analysis include usage of tools such as SWOT, Porter‟s Five Force
Analysis, Cost Benefit Analysis and Advertisement Elasticity of Demand. All these tools
holistically covered the qualitative as well as quantitative aspects of this report. SWOT and
Porter‟s Five Force Analysis were mainly used to understand the company itself and the
market conditions. Cost Benefit Analysis and Advertisement Elasticity of Demand analysed
the decision of changing advertising strategies such as introduction of Zoozoos and how it
impacted the company by changing the levels of brand awareness among its consumers.
The report concludes that the change in advertising strategies did help Vodafone India Private
Limited.
Vidhatri Rathi |4
ACKNOWLEDGEMENTS
I would like to acknowledge and thank:

My Business and Management Extended Essay supervisor Dr. Deepti Shah, IBDP
Co-ordinator Ms. Shivangi Panchal and my principal Dr. Tarulata for their support
and guidance with this reports

All the people who took my survey for their valuable time and opinion
Vidhatri Rathi |5
INTRODUCTION
Company Background:
Vodafone India Private Limited is one of the leading mobile network operators in
India. It is currently the second largest after Bharti Airtel India Pvt. Ltd with approximately
146.84 million customers accros the country. Vodafone India Pvt Ltd India is one of the
prime providers of 3G internet facility. It has also been the first business in the
telecommunication market to extensively advertise the availability of 3G internet facility.
Formerly called Vodafone Essar, its parent firm in the United Kingdom – the Vodafone
Group Plc bought 67% shares in Hutchison Essar, making it the controlling authority of the
business; renaming the brand from „Hutch‟ to „Vodafone‟. This transition occurred in the
year 2007, February.1 Though its parent company - Vodafone Group Plc is public limited 2 ,
Vodafone India Pvt Ltd in India functions as a private limited company.
Market Structure:
The Telecommunications market in India has rapidly grown since its introduction in
the late 1990‟s. The market has been growing ever since; the Indian market is the thrid
fastest growing market in the world.3The market is basically segmented into „wireline‟ and
„wireless‟ markets. All the companies that sell mobile services come under the category of
1
“Vodafone India”, Web , 30th August 2012, http://en.wikipedia.org/wiki/Vodafone_India
2
“About us | Vodafone”, Web, 30th August 2012, http://www.vodafone.com/content/index/about/about_us.html
3
“ Telecom Industries in India” , Web, 30th August 2012,
http://www.cci.in/pdf/surveys_reports/indias_telecom_sector.pdf
Vidhatri Rathi |6
the wireless telecommunications market. As of February 2012, Vodafone India Pvt Ltd holds
17% of the market share, led by Bharti (Airtel) which holds 19% of the market. A pie chart
below illustrates the various wireless telecommunication companies and their respective
market shares.
Brand
% Market share
Bharti
19
Vodafone India Pvt Ltd
17
Reliance
16
Idea
12
BSNL
11
Tata
9
Aircel
7
Uninor
5
Others
4
Wireless Telecommunication Market
Bharti
Vodafone
Reliance
Idea
BSNL
Tata
Aircel
Uninor
Others
Vidhatri Rathi |7
Since the competition in the Indian telecommunications market is fierce, Vodafone
India Pvt Ltd has always strived to promote its services through various means. Being the
third fastest telecommunications market in the world, it is growing at a booming rate of 40%
per annum 4 leaving ample scope for all the businesses in the market. This makes stable brand
awareness very important for any of the firms that wishes to or already competes in this
market. High brand awareness in an established consumer base would be ideal for any
business, including Vodafone India Pvt. Ltd.
Problem Background:
In the year 2007, Vodafone entered the Indian market through Hutchison Essar. Hutch
by itself had a very strong image in the Indian market, using „the pug‟ as its mascot for most
of it advertisements and methods of promotion. As Vodafone India Pvt Ltd entered the
market, it not only wished to re-brand itself but also, it realize that „the pug‟ as its
predecessor was losing its effectiveness and thus had to be replaced or added to. 5 Vodadone
also intended to create a brand image of its own, which was different from that of Hutch‟s.
The management at Vodafone India Pvt Ltd realized that the earlier advertisements solely
focused on network quality or change; understanding that promoting the value added services
innnovatively could help Vodafone India Pvt Ltd create a brand image of its own to
eventually increase brand awareness, thus introducing the Zoozoos and other changes in
advertising strategies.6
4
“Communication in India” , Web, 30th August 2012, http://en.wikipedia.org/wiki/Communications_in_India
5
“Hutch‟s Pug to Vodafone‟s Zoozoo – A story of successful brand transition”, Web, 30 th August 2012,
http://ramblogs.wordpress.com/2009/05/25/vodafones-zoozoo-ad/
6
“Pug to Zoozoo report” , Web, 30th August 2012, http://www.scribd.com/doc/55474931/37914686-Pug-to-
Zoozoo-Report
Vidhatri Rathi |8
This report focuses on how the change in advertising strategies was brought on by
Vodafone India Pvt Ltd and its effectiveness on the brand awareness of Vodafone India Pvt
Ltd. Bringing us to, “To what extent has the change in advertising strategies helped
Vodafone India Private Limited increase brand awareness?”
Justification of study:
The 4 main P‟s of marketing include Price, Product, Place and Promotion which
together combine to make an intergral marketing mix7 for any good or service sold. This
report will mainly focus on „promotion‟ as an important part of Vodafone India Pvt Ltd‟s
marketing strategy.
Given that Vodafone India Pvt Ltd functions in a highly competitive market of
wireless telecommunication, its prices have to be set around the market price; the highly
competitive market causes the price to be set on its own by the market forces. All businesses
in this market, are mostly price takers, since they take the market prices as is. Being a highly
competitive market, every business will have a lot of competitiors making any individual firm
unable to influence the market prices by themselves. Considering the given scenario,
Vodafone India Pvt Ltd does not need to strategize its pricing decisions much, it only needs
to keep to the market price.
Since the nature of the market it is in is such, that radical innovations are unlikely
give that they are very risky in nature. If a business attempts to do so, there are great chances
of failure and they may eventually end up losing their place in the market. In the market of
7
Hoang, Paul. Business and Management, IBID Press, 2007
Vidhatri Rathi |9
wireless telecommunication, the basic service provided is esentially the same by all
businesses. Though each business may have a USP (unique selling point), such as Vodafone
India Pvt Ltd being the only mobile network operator offering VAS (value added services)8,
the product in essence remains the same.
As Vodafone directly reaches out to the consumers directly, place as a part of the
marketing mix is of little concern. In order to inform the consumers about its unique selling
point, that is the value added services, the promotional strategies are of high importance, thus
making „promotion‟ an integral part of Vodafone India Pvt Ltd‟s marketing mix. Through
promotion, what Vodafone India Pvt. Ltd intends to do is to increase its brand awareness.
Increased brand awareness will theoretically lead to increased sales, which will increase
profits and thus competitiveness. Not only did Vodafone India Pvt Ltd invest $ 50 million in
brand transitioning,9 it also invested a large amount in the introduction of the Zoozoos in
order to create and maintain its brand image so that its brand awareness can be increased in
comparison to its largest competitors. Making the focus of this report: “ To what extent has
the change in advertising strategies helped Vodafone India Private Limited increase
brand awareness?”
8
“Hutch‟s Pug to Vodafone‟s Zoozoo – A story of successful brand transition”, Web, 30 th August 2012,
http://ramblogs.wordpress.com/2009/05/25/vodafones-zoozoo-ad/
9
“Hutch‟s Pug to Vodafone‟s Zoozoo – A story of successful brand transition”, Web, 30 th August 2012,
http://ramblogs.wordpress.com/2009/05/25/vodafones-zoozoo-ad/
V i d h a t r i R a t h i | 10
Objectives:
Upon the basis of the research question framed above, this report aims to:

Evaluate the reasons as to which Vodafone India Pvt Ltd introduced Zoozoos as a part
of their advertising strategy and how it would change brand awareness among
consumers through cost benefit analysis.

Evaluate the impact of introduction of Zoozoos on brand awareness of Vodafone
India Pvt Ltd by analyzing survey results.

Validate whether the investment in changing advertisement strategies was fulfilling or
not by comparing advertising elasicity of demand over some financial years.

Compare how the change in advertising strategies did/did not affect its competitors by
using Porter‟s Five Force analysis since „brand awareness‟ in essence is relative in
nature.
V i d h a t r i R a t h i | 11
Significance:
This report can be useful to multiple stakeholders of Vodafone India Pvt Ltd in the following
ways:

Management at Vodafone India Pvt Ltd – This report will enable the management to
analyze the decision they made and whether it reached its accomplished goal of not.
This, may even be useful in the future as it records important market trends.

Competitors – This report may give competitors the benefit of knowing how change
in advertising strategies work in the wireless telecommunication market and whether
it should or shold not implement such changes
Limitations:
A few limitations of this study will be:

Since Vodafone is a private limited company, the financial data obtained may not be
100% accurate.

Give the size of the business, it would not be possible to meet appropriate personnel
of Vodafone India Pvt Ltd in order to conduct interviews.

Articles and other secondary researouces may not be very precise.
V i d h a t r i R a t h i | 12

The survey conducted may not have been answered truthfully, thus hampering the
results.

A small sample of consumers was taken, which may represent an incomplete opinion
about „brand awareness‟ of Vodafone India Pvt Ltd.
Methodology:
Various internet websites and articles10 were referred to in order to initally understand the
situation and then look at it in terms of scope for research eventually bringing me to the
question, “To what extent has the change in advertising strategies helped Vodafone
India Private Limited increase brand awareness?” In order to conduct a proper study,
both primary and secondary research were conducted in the following ways:
Secondary Research:

Online news articles and blogs were referred to.

The corporate website of Vodafone Group Plc was used for official information

www.capitalline.com was used in order to obtain financial data of Vodafone India Pvt
Ltd11
Primary Research:A survey was conducted among 50 people of varied age groups in order to
understand patterns in brand awareness of Vodafone India Pvt Ltd.12
10
Refer to bibliography
11
Appendix 1 – Financial data of Vodafone India Private Limited
12
Appendix 2 – Survey – Vodafone Brand Awareness
V i d h a t r i R a t h i | 13
FINDINGS AND ANALYSIS
SWOT Analysis of Vodafone India Pvt Ltd:
SWOT is a decisions making framework which analyzes the stregths, weaknesses (internal
factors) as well as the opportunities and threats (external factors) .13 Knowing these would
help Vodafone India Pvt Ltd make a more informed decision about what sort of changes can
be made in the business decisions in order to increase Vodafone India Pvt. Ltd‟s brand
awareness.
Strengths:

Vodafone Group Plc is the 2nd largest mobile telecommuncation company in the
world with a very strong international presence in over 30 countries with close to 440
million subscribers.14

Not only in the international market, Vodafone India Pvt Ltd has a substantial
consumer base in India itself of about 146.84 million subscribers. 15

Its promotional strategies have been consistenly good. Thus giving the company a
good brand image.

It is the only wireless telecommuncation company that offers “Value Added Services”
among all its key competitors in India.16
13
Hoang, Paul. Business and Management, IBID Press, 2007
14
“Vodafone”, Web, 30th August 2012, http://en.wikipedia.org/wiki/Vodafone
15
16
“Vodafone India”, Web, 30th August 2012, http://en.wikipedia.org/wiki/Vodafone_India
“Hutch‟s Pug to Vodafone‟s Zoozoo – A story of successful brand transition”, Web, 30th August 2012,
http://ramblogs.wordpress.com/2009/05/25/vodafones-zoozoo-ad/
V i d h a t r i R a t h i | 14
Weaknesses:

It is still not the market leader of the wireless telecommunications market 17, inspite of
the booming growth.18

Due to lawsuites and controversies with the governement19, the goodwill of Vodafone
India Pvt Ltd may have been harmed.

Rural India is a largely untouched market for wireless telecommunication. Vodafone
India Pvt Ltdhas not fully penetrated the market unlike its main competitior, Bharti
Airtel who accounts for 27% ownership in the rural market.20
Opportunities:

Government policies in the telecommunications market are fairly liberal21 in order to
encourage more firms into the market thus making business a lot easier for Vodafone
India Pvt Ltd and other prospective businesses.

The cricket season, namely the Indian Premiere League became a huge platform for
advertisements (mainly the Zoozoos)

Since the rural telecommunications market is mostly untouched, there is a lot of scope
for niche growth. 22
17
“Vodafone India”, Web, 30th August 2012, http://en.wikipedia.org/wiki/Vodafone_India
18
“Communication in India”, Web, 30th August 2012, http://en.wikipedia.org/wiki/Communications_in_India
19
Vodafone India”, Web, 30th August 2012, http://en.wikipedia.org/wiki/Vodafone_India
20
“India‟s Rural Market Beckons”, Web, 30th August 2012, http://www.telecomasia.net/content/indias-rural-
market-beckons
21
“India‟s telecom sector”, Web, 30th august 2012,
http://www.cci.in/pdf/surveys_reports/indias_telecom_sector.pdf
22
“India‟s Rural Market Beckons”, Web, 30th August 2012, http://www.telecomasia.net/content/indias-ruralmarket-beckons
V i d h a t r i R a t h i | 15
Threats:

Vodafone India Pvt Ltd is a part of a highly competitive market, which means that it
needs to be competitive at all times by keeping low prices, and quality maintained.

Its biggest competitor, Bharti Airtel has strategic alliances with several international
brands such as Nokia, Sony-Ericson23 etc which may prove to be a threat to Vodafone
India Pvt Ltd.
23
“Vodafone SWOT Analysis”, Web, 30th August 2012, http://www.scribd.com/doc/26197780/VodafoneSWOT-Analysis
V i d h a t r i R a t h i | 16
Porter‟s Five Forces Analysis of Wireless Telecommunication Market in India:
Porter‟s Five Forces Analysis, also knows as competitor analysis, assesses the level of
competition in a market.
24
Competitive rivalary in a business is influenced by five main
factors as the name suggests: Threat of new entrants, Threat of subsititutes, Bargaining power
of suppliers , Extent of rivalry among existing competitors and Bargaining power of
customers. Since the wireless telecommunications industry is very widespread and requires
every business to to be on its toes, it is important to analyze the extend of competition in the
market before making any decision. Given the minimal difference between the amount of
market share held between Vodafone India Pvt Limited and Bharti, it is important for
Vodafone to analyze the competiton to either maintain or improve its market share by
increasing brand awareness. Since the report focuses on brand awareness, this tool is
important as brand awareness is always relative in nature. The reason why most businesses
emphasize on increasing their brand awareness is because it gives them an edge over their
other competitors, thus this competitors‟ analysis.
Threat of new entrants to an industry:
As the wireless telecommunication market is fairly recent in India in comparison to other
parts of the world, it is growing at a faster pace than other country‟s markets. This means
there is huge potential for growth, not only for the market but also for any prospective firm.
India‟s teledensity (the number of phone lines per 100 people25) is approximately 68%26 thus
24
25
26
Hoang, Paul. Business and Management. IBID Press, 2007
“Glossary | Telecom Egypt”, Web, 30th August 2012, http://ir.telecomegypt.com.eg/Glossary.asp
“Teledensity in India reaches 67.6%”, Web, 30th August 2012, http://www.indiatelecomonline.com/teledensity-in-india-reaches-67-67/
V i d h a t r i R a t h i | 17
causing several domestic as well as international firms to enter this market. Rising incomes,
lenient government policies and India‟s cheap labour and capital costs may be another reason
as to why companies may be attracted to enter the market of wireless telecommunication.
However, businesses such as Bharti Airtel, Vodafone, Reliance have well established
themselves and a new entrant may have to come up with innovative strategies that not only
cover up for the huge start up capital costs, but also match the expertise of the already present
market leaders. Also, for any international entrant, accustomizing their businesses to the
cultural settings of a country like India would be another big obstacle.
Thus, the threat of new entrants is high.
Threat of substitutes:
As established earlier, the competition in the market is high. Though the product may not be
substituted in itself, there are several companies that it may be substituted with. Here, the
situation of „brand loyalty‟ is to be considered. Specfically in the market of wireless
telecommunications, brand loyalties have always existed. However, brand loyalties play a
role only upto a certain extent; it has been seen that if price differences get too remarkable,
then brand loyalty fails. Every company in the market is striving to reach the lowest price in
order to attract most costumers, hence maknig the threat of substitutes high.
Extent of rivalary among existing competitors
Even though Vodafone hols the second largest amount of shares in the Indian wireless
telecommunication industry, the competition in the market is high. Airtel holds 19% market
V i d h a t r i R a t h i | 18
share, whereas Vodafone holds 17%
27
which shows how close the competitors in this
market are to each other. Intensive promotional strategies are employed by all businesses in
this industry in attempt to gain a competitive edge.
Bargaining power of suppliers:
Given that there are a lot of mobile network providers in the market, there will also be a large
number of people ready to supply the raw material requirements (suppliers). Since there will
be a lot of suppliers in the market, no single supplier will have control over the price as it will
be set by the market forces. The suppliers too will try to keep their prices low in order to be
more competitive, thus making the bargaining power of suppliers low.
Bargaining power of consumers:
Since the market is competitive, the choice lies in the hands of the consumers as they have a
lot of choices. Other than the consumers who are strictly brand loyal, the bargaining power of
consumers is high.
This analysis using Porter‟s Five Force model shows that the level of competition is high, this
making it more important for Vodafone or any other business in competition to ensure that
their promotional strategies are reaching out to the target audience since the bargaining power
of consumers in the wireless telecommuncation market is seen to be high. Hence innovative
advertising strategies such as the Zoozoos may give Vodafone the competitive edge, as well
as initiate the re-branding transition.
27
“Communication in India”, Web, 30th August 2012, http://en.wikipedia.org/wiki/Communications_in_India
V i d h a t r i R a t h i | 19
Cost Benefit Analysis:
Cost benefit analysis is esentially a decision making tool which takes into account the costs
and benefits of making any decision.
28
It not only considers the „costs‟ and „benefits‟ in
terms of numbers, but also includes qualitative costs and benefits of that particluar decision.
Changing of advertisment strategy is a change in the marketing mix of the product which is
an important decision. Tools like these not only help the decision making process but can also
be used after the decision has been made to analyze its possible effects on brand awareness.
Costs:

Vodafone invested 250 crore for its brand transitioning29 and almost most of it was
used to create the „Zoozoos‟

One major cost to Vodafone could be the „risk‟ it took, in order to re-brand itself. In
such large scale changes, the risk factor is extremely high too.
Benefits:

Since Vodafone re-branded itself fully, most people started to identify with Vodafone
as a brand name30

Vodafone strategically used cricket as a platform, making itself reach out to most of
the country at one go
28
Hoang, Paul. Business and Management, IBID Press 2007
“Hutch‟s Pug to Vodafone‟s Zoozoo – A story of successful brand transition”, Web, 30 th August 2012,
http://ramblogs.wordpress.com/2009/05/25/vodafones-zoozoo-ad/
30
Appendix 3
29
V i d h a t r i R a t h i | 20

Not only did they use cricket as a platform, but the Zoozoos were so popular that its
merchandise also started to appear in stores.31

Vodafone experienced an increase in sales turnover, due to successful advertisements
of its Value Added Services by Zoozoos32
31
“Vodafone to launch Zoozoo merchandise”, Web, 30 th August 2012,
http://www.financialexpress.com/news/vodafone-to-launch-zoozoo-merchandise/533581/
32
Appendix 1
V i d h a t r i R a t h i | 21
Advertising elasticity of demand:
Advertising elasticity of demand is a tool that measures the responsiveness of demand as
advertising expenditure changes. In order to calculate these values, the demand will be
quantified using the sales turnover of Vodafone. If the advertising elasticity of demand is
below 1, it is said to be inelastic, which means demand (or sales turnover) does not change
much with change in advertisment expenditure; whereas an elastic advertisement elascitiy of
demand would be that as advertising expenditure increases, sales turnover increases too. This
is an important tool for Vodafone in order for them to analyze how the investment in
advertisment affected its sales turnover. It may later be used as a reference to make decisions.
If the aim of increasing brand awareness is achieved (and it is assumed that increase in
advertisment expenditure always leads to increase in sales or vice versa) then the values of
AED should be showing an appropriate change through the years.
Advertisement elasticity of demand is calculated by the given formula:
% ∆ 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑑𝑒𝑚𝑎𝑛𝑑𝑒𝑑
% ∆ 𝑎𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑒𝑚𝑒𝑛𝑡 𝑒𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒
The following table shows the values of cumulative net sales and advertisement expenditure
as seen in December 2006 and March 200833. These two financial years are considered
because the change from „Hutch‟ to „Vodafone‟ took place then thus implying the change in
advertisement strategies.
33
Appendix 1: Financial Data of Vodafone India Pvt Limited
V i d h a t r i R a t h i | 22
(Rs in crore)
December 2006
March 2008
Cumulative Net Sales
9246.23
18564.41
Cumulative adv.
expenditure
417.04
727.08
Using the formula mentioned above, the percentage change in quantity demanded
(represented by net sales) is 50.19% whereas the percentage change in advertisement
expenditure is 42.64%. This makes the AED approximately 1.2. After calculating the values
of advertising elasticity of demand, it is seen to be elastic.34 This means that the increase in
advertisement expenditure has lead to an even greater increase in net sales. Increase in net
sales imply that more people recognized the brand due to new advertisement strategies such
as Zoozoos incorporated by Vodafone.
34
Appendix 4 - AED
V i d h a t r i R a t h i | 23
CONCLUSION
This report focuses on “To what extent has the change in advertising strategies helped
Vodafone India Private Limited increase brand awareness” by outlining the effects on
changed advertisement strategies on Vodafone‟s brand awareness in the market.
The introduction emphasizes on the background on the compnay as well as the problem it had
been facing. Both primary and secondary research were used in order to understand patterns
in brand awareness. Since brand awareness is more qualitative than quantitative in nature, the
survey was key. SWOT analysis considered the strengths, weaknesses, opportunities and
threats to Vodafone and how those affect any strategic decision they make. Porter‟s Five
Force Analysis was used to understand the market conditions in terms of competition and
where Vodafone stands in terms of brand awareness. Later, Cost Benefit Analysis was used
to analyze the decision of changing advertising strategies in attempt to increase brand
awareness. Since most of these models and tools looked at largely qualitative aspects,
Advertisement Elasticity of Demand was used to determine whether this particular decision
to increase brand awareness was financially viable or not. Vodafone capitalized on the
opportunity of the Indian Premier League using cricket as a platform. That was one of the
main reasons that Zoozoos became such a hit. Had the Zoozoos been introduced at some
other time, they may not have been so successful. The Zooozoos were mainly the cause for
increase in brand awareness of Vodafone India Pvt Ltd. On the basis of research, finding and
analysis, I can conclude that change in advertising strategies, specifically the introduction of
the Zoozoos helped Vodafone to a very large extent as it increased the brand awareness and
helped Vodafone India Pvt Ltd establish a brand image, different than that of Hutchison Essar
India.
V i d h a t r i R a t h i | 24
To bring along a change in the advertisement strategies, Vodafone India Pvt Ltd incurred
extra overhead costs that may have distorted the cash flow of the business. Due to lack of
access to all the data, this hypothesis remains inconclusive. Costs incurred were high, but it
can also be seen that the increase in advertisements costs have lead to a greater increase in the
net sales of Vodafone India Pvt Ltd as seen while determining the advertisement elasticity of
demand. In terms of the risk factor, the decision to change advertisement strategies was
highly risky for the business given the scale of the change and the level of competition in the
telecommunications market. If the change in advertising strategies would not have worked in
the favor of Vodafone India Pvt Ltd, it could have lost its position in the market as well as its
existent brand image. Since the change of advertisement strategies is not simply an
operational change, it took time for the change to be implemented and for the results to be
seen. As the change was strategic in nature, it took relatively longer to take any effect on
brand awareness of the consumers.
However, this report is limited in its perspective. It only considers „promotion‟ as a part of
the marketing mix. It should be acknowledged that the marketing mix has other important
aspects which may or may not have helped Vodafone increase brand awareness. Also, other
factors such as effectiveness and position of competitors in the market may have affected the
brand awareness of Vodafone. The financial data upon which some conclusions have been
drawn may be inaccurate due to lack of access to all the data. Furthermore, since „brand
awareness‟ is more qualitative than quantitative in nature, subjectivity in defining brand
awareness shall always remain. Another limitation is that, the survey has been conducted
only among 50 people; a larger and more varied sample group would have provided results
that would have been more like the responses of the population.
V i d h a t r i R a t h i | 25
BIBLIOGRAPHY
1. “Vodafone‟s advertising strategy in India”, Web, 30th Aug 2012,
http://www.scribd.com/doc/34387909/Vodafone-s-Advertisement-Strategy-in-India
2. “The Zoozoo effect”, Web, 30th August 2012,
http://www.indianexpress.com/news/the-zoozoo-effect/465365/0
3. “Hutch‟s Pug to Vodafone‟s Zoozoo – A story of successful brand transition”, Web,
30th August 2012, http://ramblogs.wordpress.com/2009/05/25/vodafones-zoozoo-ad/
4. “Pug to Zoozoo report”, Web, 30th August 2012,
http://www.scribd.com/doc/55474931/37914686-Pug-to-Zoozoo-Report
5. “Communication in India, Web, 30th August 2012,
http://en.wikipedia.org/wiki/Communications_in_India
6. “The death of STD”, Web, 30th August 2012,
http://www.indianexpress.com/news/the-death-of-std/14483/
7. “Vodafone India SWOT analysis” , Web, 30th August 2012,
http://www.wikiswot.com/SWOT/4_/Vodafone_India.html
8. “Vodafone SWOT analysis” , Web, 30th August 2012,
http://www.scribd.com/doc/26197780/Vodafone-SWOT-Analysis
9. “India‟s telecom sector”, Web, 30th August 2012,
http://www.cci.in/pdf/surveys_reports/indias_telecom_sector.pdf
10. “Vodafone”, Web, 30th August 2012, http://en.wikipedia.org/wiki/Vodafone
11. “Vodafone India”, Web, 30th August 2012,
http://en.wikipedia.org/wiki/Vodafone_India
12. “About us | Vodafone”, Web, 30th August 2012,
http://www.vodafone.com/content/index/about/about_us.html
V i d h a t r i R a t h i | 26
13. Hoang, Paul. Business and Management. IBID Press 2007
14. “Vodafone Strategy”, Web, 30th August 2012,
http://www.slideshare.net/sk_prince/vodafone-strategy
15. “IMC Plan for Vodafone”, Web, 30th August 2012,
http://www.slideshare.net/akhil.gupta/vodafone-india-1
16. www.capitaline.com for data of Vodafone India Private Limited
17. “Vodafone brand awareness”, Web, 30th August 2012,
http://www.surveymonkey.com/s/X5WKCZZ
18. “Vodafone to focus on rural areas for services in India”, Web, 30th August 2012,
http://www.mgovworld.org/News/vodafone-to-focus-on-rural-areas-for-services-inindia
19. “India‟s rural market beckons”, Web, 30th August 2012,
http://www.telecomasia.net/content/indias-rural-market-beckons
20. “Zoozoos sweat it out in rural sun”, Web, 30th August 2012, http://www.businessstandard.com/india/news/zoozoos-sweat-it-out-in-rural-sun/461136/
21. “Vodafone to launch Zoozoo merchandise” , Web, 30th August 2012,
http://www.financialexpress.com/news/vodafone-to-launch-zoozoomerchandise/533581/
methodology. Limitation. Break even?
V i d h a t r i R a t h i | 27
SUPPORTING DOCUMENTS AND APPENDICES
Appendix 1: Financial Data of Vodafone India Pvt Limited
Company >> Finance
>> Profit & Loss
Vodafone Cellular Ltd
Industry
:Telecommunications
- Service Provider
(Rs in Crs)
Year
Mar 11(12)
Mar 10(12)
Mar 09(12)
Mar 08(15)
Dec
06(12)
INCOME :
Sales Turnover
Sales turnover /
Operating Income
4,72
6.15
4,72
6.15
Total Income
Total Expenditure
Operating Profit
Gross Profit
Profit Before Tax
Reported Net Profit
http://www.capitaline
.com
3,97
6.88
4,72
6.15
4,85
3.07
Net Sales
Advertisement
3,97
6.88
186.
77
3,39
3.77
3,97
6.88
4,09
1.43
166.
67
3,82
4.50
1,02
8.57
228.
21
288.
22
288.
22
3,39
3.77
2,32
9.76
3,39
3.77
3,47
9.06
189.
03
3,15
7.93
933.
5
335.
09
247.
54
247.
54
2,32
9.76
796
.91
2,32
9.76
2,37
9.93
244.
09
2,75
3.98
725.
08
208.
42
302.
37
303.
67
796
.91
796
.91
87.
39
1,94
2.25
437.
68
-8.23
455.
14
456.
64
V i d h a t r i R a t h i | 28
Company >> Finance
>> Profit & Loss
Vodafone Essar
Mobile Services Ltd
Industry
:Telecommunications
- Service Provider
(Rs in Crs)
Year
Mar 11(12)
Mar 10(12)
Mar 09(12)
Mar 08(15)
Dec 06(12)
INCOME :
Sales Turnover
Sales turnover /
Operating Income
2,48
9.47
2,48
9.47
Total Income
Total Expenditure
Operating Profit
Gross Profit
Depreciation
Profit Before Tax
Reported Net Profit
http://www.capitaline
.com
2,14
2.78
2,48
9.47
2,77
5.49
Net Sales
Advertisement
2,14
2.78
76.0
5
2,03
8.73
2,14
2.78
2,44
1.21
1,68
3.64
757.
57
692.
91
166.
56
526.
35
302.
02
2,18
1.42
2,18
1.42
2,03
8.73
2,07
4.44
61.5
4
55.3
2,11
1.14
664.
35
556.
42
158.
66
397.
76
211.
15
2,03
8.73
1,30
8.16
2,18
1.42
2,22
3.40
79.8
8
1,49
8.23
576.
21
502.
26
217.
2
285.
06
299.
22
1,30
8.16
1,30
8.16
1,34
9.61
36.9
8
1,39
7.52
825.
88
812.
17
246.
14
566.
03
569.
96
V i d h a t r i R a t h i | 29
Company >> Finance
>> Profit & Loss
Vodafone Digilink Ltd
Industry
:Telecommunications
- Service Provider
(Rs in Crs)
Year
Mar 11(12)
Mar 10(12)
Mar 09(12)
Mar 08(15)
Dec 06(12)
INCOME :
Sales Turnover
Sales turnover /
Operating Income
4,02
2.51
4,02
2.51
Total Income
Total Expenditure
Operating Profit
Gross Profit
Profit Before Tax
Reported Net Profit
http://www.capitaline
.com
3,57
6.83
4,02
2.51
4,03
9.65
Net Sales
Advertisement
3,57
6.83
132.
42
3,13
0.15
3,57
6.83
3,70
7.80
110.
92
3,54
9.45
490.
2
146.
72
380.
87
392.
47
3,13
0.15
2,75
0.19
3,13
0.15
3,21
8.37
102.
74
3,08
6.77
621.
03
309.
87
333.
66
414.
19
2,75
0.19
1,27
1.89
1,27
1.89
2,75
0.19
2,83
1.43
146.
35
1,27
1.89
1,51
3.95
64.8
1
2,48
3.96
734.
41
563.
47
1,95
0.31
881.
12
727.
36
31.9
3
341.
81
31.7
1
349.
78
V i d h a t r i R a t h i | 30
Company >> Finance
>> Profit & Loss
Vodafone Essar
Gujarat Ltd
Industry
:Telecommunications Service Provider
(Rs in Crs)
Year
Mar 10(12)
Mar 09(12)
Mar 08(15)
Dec 06(12)
Dec
05(12)
INCOME :
Sales Turnover
Sales turnover /
Operating Income
2,41
5.02
2,41
5.02
Total Income
Total Expenditure
Operating Profit
Gross Profit
Profit Before Tax
Reported Net Profit
http://www.capitaline.
com
2,28
0.62
2,41
5.02
2,50
5.66
Net Sales
Advertisement
2,28
0.62
59.9
6
2,27
1.23
2,28
0.62
2,56
7.98
51.6
5
1,63
0.70
874.
96
823.
57
525.
3
393.
91
2,27
1.23
1,32
3.72
2,27
1.23
2,32
9.30
69.1
2
1,37
4.08
1,19
3.90
1,14
4.53
867.
34
742.
29
1,32
3.72
894.
54
1,32
3.72
1,36
2.15
36.5
3
1,17
4.63
1,15
4.67
1,13
2.58
795.
01
805.
06
894.
54
894.
54
910
.93
36.6
3
676.
55
685.
6
675.
95
537.
56
554.
57
486.
64
424.
29
408.
46
296.
33
278.
82
V i d h a t r i R a t h i | 31
Company >> Finance
>> Profit & Loss
Vodafone Essar South
Ltd
Industry
:Telecommunications
- Service Provider
(Rs in Crs)
Year
Mar 10(12)
Mar 09(12)
Mar 08(15)
Dec 06(12)
Dec 05(12)
INCOME :
Sales Turnover
Sales turnover /
Operating Income
8,05
1.57
8,05
1.57
6,96
3.96
8,05
1.57
8,32
7.62
Net Sales
Total Income
Advertisement
193.
07
Gross Profit
Reported Net Profit
296.
87
Operating Profit
http://www.capitaline
.com
5,41
2.67
5,41
2.67
6,96
3.96
7,07
8.07
197.
81
5,94
4.23
2,38
3.39
1,74
0.17
Total Expenditure
6,96
3.96
2,36
8.81
5,41
2.67
5,55
5.31
50.5
3
5,07
0.37
2,00
7.70
1,55
5.39
264.
02
2,36
8.81
1,21
1.79
1,21
1.79
2,36
8.81
2,40
2.40
136.
53
1,21
1.79
1,23
2.71
119.
94
3,83
6.95
1,71
8.36
1,44
7.43
1,90
7.51
494.
89
360.
28
354.
28
32.6
8
1,11
3.73
118.
98
5.44
168.
07
V i d h a t r i R a t h i | 32
Company >> Finance >>
Profit & Loss
Vodafone Essar East Ltd
Industry
:Telecommunications Service Provider
(Rs in Crs)
Year
Mar 11(12)
Mar 10(12)
Mar 09(12)
Mar 08(15)
Dec 06(12)
INCOME :
Sales Turnover
Sales turnover /
Operating Income
947.9
5
947.
95
889.
02
947.9
5
1,025
.94
Net Sales
Total Income
Advertisement
32.4
2
Profit Before Tax
Reported Net Profit
94.05
Operating Profit
Gross Profit
http://www.capitaline.co
m
869.
69
869.
69
889.
02
985.
85
651.
17
334.
68
298.
23
183.
21
122.
3
885.
38
885.
38
869.
69
891.
75
26.5
3
28.1
751.5
5
274.3
9
224.9
3
130.3
9
Total Expenditure
889.
02
539.
06
885.
38
906.
13
39.2
1
588.
45
303.
3
263.
02
153.
93
111.
32
539.
06
539.
06
547.
57
19.3
586.
14
319.
99
315.
71
205.
37
206.
37
328.
23
219.
34
216.
96
168.
33
173.
4
V i d h a t r i R a t h i | 33
Company >> Finance >>
Profit & Loss
Vodafone Essar Spacetel
Ltd
Industry
:Telecommunications Service Provider
(Rs in Crs)
Year
Mar 11(12)
Mar 10(12)
Mar
09(12)
Mar
08(15)
Dec
06(12)
INCOME :
Sales Turnover
Sales turnover / Operating
Income
1,375.
00
1,375.
00
Total Income
Total Expenditure
Operating Profit
Gross Profit
Reported Net Profit
http://www.capitaline.com
655.
39
1,375.
00
1,429.
23
Net Sales
Advertisement
655.3
9
119.7
7
76.
43
655.3
9
700.8
9
106.
35
2,221.
92
792.6
9
1,299.
05
1,821.
67
76.4
3
0
76.4
3
83.6
1
62.
34
1,485.
77
784.8
8
1,125.
91
1,530.
69
0
0
0
0.9
2
8.9
1
578.
23
494.
62
740.
9
847.
85
0
0
0.0
1
0.0
1
56.
46
55.
54
71.
36
73.
32
13.
42
13.
41
15.
62
15.
99
V i d h a t r i R a t h i | 34
Company >> Finance
>> Profit & Loss
Vodafone India Ltd
Industry
:Telecommunications
- Service Provider
(Rs in Crs)
Year
Mar 11(12)
Mar 10(12)
Mar 09(12)
Mar 08(15)
Dec 06(12)
INCOME :
Sales Turnover
Sales turnover /
Operating Income
2,65
2.03
2,65
2.03
Total Income
Total Expenditure
Operating Profit
Gross Profit
Reported Net Profit
http://www.capitaline
.com
2,48
7.65
2,65
2.03
3,51
3.12
Net Sales
Advertisement
2,48
7.65
118.
06
2,54
7.16
2,48
7.65
3,31
9.60
82.4
9
3,75
4.44
241.
32
849.
59
1,07
9.62
2,54
7.16
2,73
3.76
2,73
3.76
2,54
7.16
2,78
2.70
71.5
9
1,63
7.88
1,63
7.88
2,73
3.76
2,87
3.61
88.9
9
1,63
7.88
1,68
5.94
35.5
2,21
1.72
2,01
9.45
2,03
1.44
1,11
3.98
1,10
7.88
763.
25
842.
17
571.
96
613.
39
337.
23
593.
44
457.
19
250.
32
146.
74
365.
33
356.
21
V i d h a t r i R a t h i | 35
Appendix 2: Survey
1. With which brand name do you identify better – Hutch or Vodafone?
2. Which image do you associate most with the brand „Vodafone‟?
The pug
Zoozoos
The red color
Other
3. In terms of effectiveness, how effective do you think were the zoozoos? (Rate from 1
to 4)
4. Do you think the Zoozoos should have continued?
Yes
No
5. Which cellular company has the most effective advertisements according to you?
Vodafone
Bharti (Airtel)
Idea
BSNL
V i d h a t r i R a t h i | 36
Uninor
Reliance
Others
V i d h a t r i R a t h i | 37
Appendix 3: Survey results
More identified by users
Hutch
Vodafone
Image associated with Vodafone
70%
60%
50%
40%
30%
20%
10%
0%
The Pug
Zoozoos
The Red Color
Other
V i d h a t r i R a t h i | 38
How effective were Zoozoos?
60%
50%
40%
30%
How effective were
Zoozoos?
20%
10%
0%
Barely
effective
Not so
effective
Fairly
effective
Extremely
effective
Zoozoos: Continued or not?
Yes
No
V i d h a t r i R a t h i | 39
Most effective ads
Vodafone
Airtel
Idea
BSNL
Uninor
Reliance
V i d h a t r i R a t h i | 40
Appendix 4: Calculating Advertisement Elasticity of Demand
% change in quantity demanded (net sales):
(18564.41 − 9246.23)
𝑥 100 = 50.19%
18564.41
% change in advertisement expenditure:
(727.08−417.04)
727.08
𝑥 100 = 42.64%
Now using the formula of AED:
% ∆ 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑑𝑒𝑚𝑎𝑛𝑑𝑒𝑑
50.19%
=
= 1.17
% ∆ 𝑎𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑒𝑚𝑒𝑛𝑡 𝑒𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒
42.64%