Dear All,
As I am wearing marketing hat today since morning, a thought came which is in my mind since B School days.
In most of the big businesses , marketing spend is %age of revenues for different business units. So if Coca-Cola selles twice that of Fanta, its marketing budget would be twice and a new launch with hardly get any marketing money
Now, that bamboozles me. who needs marketing. A product which is just launched or a product who is already selling over $100M/ year. I would go for new product or struggling product but somehow the world goes other way around. Can anyone throw some logic to clarify my confusion??
Example of Chennai express actually follows my logic where they are trying to cover bad product by heavy marketing so that one time audience do come and they recover their production costs which can be second logic behind huge marketing budgets.
Now, let me tell you 2 examples of recent businesses where I have worked so that I can give live example. Naukri.com 0 years back went for TV commercial with marketing budget much more than conventional %age of their revenues and their bet was successful. if they haven't gone through that route, they still may have been a 10 Cr company. On the other hand, HCL ( one of my close frnd have workld there) launched their CDC centers ( on lines of NIIT) and they are big failures because they followed the logic of allocating marketing budgets to already successful business units??
So in short, my question to my marketing friends is simple, what is the logic behind marketing budgets.?
As I am wearing marketing hat today since morning, a thought came which is in my mind since B School days.
In most of the big businesses , marketing spend is %age of revenues for different business units. So if Coca-Cola selles twice that of Fanta, its marketing budget would be twice and a new launch with hardly get any marketing money
Now, that bamboozles me. who needs marketing. A product which is just launched or a product who is already selling over $100M/ year. I would go for new product or struggling product but somehow the world goes other way around. Can anyone throw some logic to clarify my confusion??
Example of Chennai express actually follows my logic where they are trying to cover bad product by heavy marketing so that one time audience do come and they recover their production costs which can be second logic behind huge marketing budgets.
Now, let me tell you 2 examples of recent businesses where I have worked so that I can give live example. Naukri.com 0 years back went for TV commercial with marketing budget much more than conventional %age of their revenues and their bet was successful. if they haven't gone through that route, they still may have been a 10 Cr company. On the other hand, HCL ( one of my close frnd have workld there) launched their CDC centers ( on lines of NIIT) and they are big failures because they followed the logic of allocating marketing budgets to already successful business units??
So in short, my question to my marketing friends is simple, what is the logic behind marketing budgets.?
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