Perfect storm or proper tempest?

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Outside one of its Hertforshire supermarket outlets, Tesco is advertising discounts of 5p per gallon of petrol on ‘grocery’ spends of £50 and over. Inside the door, it has a bank of Tesco Mobile prepay handsets going for between £10 and £100.

Tesco Mobile’s latest advertising campaign, on bus stops across the country, claims its tariffs "won’t crunch your credit", whilst also making a play of its airtime partnership with O2. "A good reception," it promises customers.

Tesco Mobile has caught the mood of the nation. Its marketing is pitch perfect, compelling customers to part with hard earned cash in a severe economic downturn. The first instance, here, is clever and opportunistic marketing.

The second suggests the ‘credit crunch’ is a perfect storm for Tesco Mobile. Judging by its recent figures, it might be a proper tempest for premium network brand Vodafone.
Vodafone’s gloom

Vodafone’s results for the quarter ended June 30 suggested for the first time the mobile industry is not fully resistant to the global economic downturn.

Outgoing Vodafone chief Arun Sarin admitted as much. "There’s a big macroeconomic picture that’s playing through, and frankly we’re not immune," he said.

In the UK, voice revenues were down 4.4 per cent and overall revenue growth was flat at 2.1 per cent. The UK business also shed 27,000 customers from its 18.5 million base.

Vittorio Colao, Sarin’s successor, said trouble with the economy had resulted in reduced footfall to its stores and suggested Vodafone would tackle future sales by modifying its portfolio to suit "constrained" families.

"More SIM-only deals, lower prices, maybe less fancy handsets and maybe handset renewal times will be pushed a little bit further," he said.

Full article in Mobile News issue 420 (August 11, 2008).

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