Marketing Budget_ Where is the logic

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.?

Overemphasis on Education in Indian context_Do we have so many formal sector jobs??

Hi Friends

The recent mid day meal fiasco got me to think on a very different direction. There is a lit of emphasis on literacy and education all around us . The government has introduced various schemes like Right to Education, Sarv Shiksha Abhiyan , Mid day meal, Ladli scheme for girl child. Similarly, there are various NGO's working in this direction to educate children. In mass media, you always hear about importance of education and how this can be a ticket to get out of poverty.

Then there are tons of reports coming about how poor the education delivery in India is and x% of students in class 5 can't read class 2 text. How India is having very young population and thus focus on vocational education to make them employable.

My thought is if everybody gets educated the way every intellectual thinks, then what would happen. India population is 120 Crs and we have limited resources and development. How and where these educated people would get jobs?

Let me tell you as first hand report about Mumbai economy functions. There are  lacs of people who are educated and work in white collar jobs or organised blue collar jobs like factories. But then there are lacs of people who work in unorganized sectors like auto driving, vada pav stall, sugar cane juice stall, tea vendors. plumbers, electricians, painters, cloth pressing etc who all make decent living. I had one teacher in my staff ( yah I also tried my hands to educate under privileged kids for 2 years) whose husband was sitting at home for 1 year. The reason is that he is 12th and he lost his formal job. Now, because he is educated, he do not want to do informal job like tea stall as that is below his dignity. Same conversation, I had with watchman of my colony. Looking at life style of educated class, he is also spending to get his kids private school education back in MP of course at Rs 500/month. Now surely that kid is not going to actually get into IIT or any other institute of repute as the competition is from kids of ours. But of he studies there till class 10th or 12th, he would surely do not want to be watchman or Ricksaw puller etc. Then what he would do for a living.

Somehow, I felt we are moving towards bigger disaster than what is presently there in society. Do we have so may formal sector jobs??