Read the article below and address the questions that follow.

Required 

Assume you are a newly graduated marketing student. You recall from your studies that accounting plays a vital role in the decision‐making processes of every commercial organisation. Your employer, the Trendy Tie Company, is suffering from a downturn in economic conditions, and in preparing the budget for 2018 they have reduced the marketing budget by 10%. The marketing manager suggests that, if the budget cannot be increased to the previous year’s level, then you will lose your job.

(a) Drawing on the study discussed in the article, prepare a draft report for the marketing manager to submit to the company’s accountants explaining why they should not reduce the marketing budget but rather increase the investment in social media.

(b) In drafting your report, explain why marketing might be considered an investment rather than a cost, why it is important from an accounting point of view, and how the funds could be used more effectively.

You should also consider why brands, customers and information about them are valuable assets of a company. Remember that your report is being written to the company’s accountants and you must justify your position in terms of the best financial interests of the company as opposed to best marketing practice.

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Marketing into the future The importance of social media in business marketing is becoming more apparent as those businesses who engage with customers via social media are seeing positive effects on their bottom line. Studies have shown that customers who are actively involved with a business's social media campaign generate more revenue than customers who aren't. The return on investment in social media marketing was once difficult to measure and many busi- nesses were sceptical about whether there were any true benefits or even if the social media 'fad' would stick around long enough to provide ROI. Over time we have come to learn that the benefits from an active and well managed social media platform are substantial with 92% of marketers indicating that their social media presence has generated more business exposure. These days a customer's experience with a brand doesn't just end at the check-out. Social media enhances the customer's overall experience, by allowing them to be part of an online community where they can send and receive messages, contribute their thoughts to various social media platforms and be privy to new products and promotions.