The Role of Money in Marketing Investment.

VOL. 0055 – FLORIDA, WEDNESDAY, MAY 15, 2024

Juan F. Arjona Harry

President & CEO Strategee   

Together with the other two elements necessary to formulate marketing (Time and Methodology) money plays a vital role because without money, odds of positioning are scarce or things take longer than normal, with the risks involved.

We will see some aspects of marketing investment (cash budget for investment in marketing) that becomes critical in achieving marketing objectives:

1. The marketing investment should be in percentage varying -by category and depending on the maturity of the brand- between 1.5% and 5.5% of the sales of the corporation.
   

2. Highly competitive industries percentages reach to 5.5%.
   

3. The less known is the brand (because it has not invested in its positioning or because it is a brand new), the higher will be the marketing investment.
   

4. The more competitive the industry or category, the brand comes to play a much more contributor as a differentiator, indicating that marketing investment should be higher.
   

5. To comply with the algorithm that each product corresponds to a segment and each segment has a positioning strategy required to achieve a communications strategy, brand investment is required to fully comply precisely with the communications strategy.
   

6. All brand promotional events must communicate, if they do not; they lose impact in generating of sell out.
   

7. All brand innovations that come to market, require marketing investment to enter the market, to gear in the distribution channels and put them in the awareness of potential customers to take their test, purchase and subsequent incorporate them on their consumption constellation.
   

8. All the lifting made to the trade dress of the brand means communication and must have marketing investment.
   

9. Relationship marketing strategies that are formulated and implemented require marketing investment to communicate to the market.
   

10. The more differentiation trend exists in the category; more marketing investment necessary to get the brand becomes a differentiable and eligible attribute.
    

11. The less industrial secret in a sector or category, the more demand on marketing investment to enhance the brand.
    

12. The less processing technology in a category or industry will be more relevant and necessary investment in marketing that enables the achievement of strategic degrees of freedom over the other competitors.
    

13. The fewer barriers to entry in an industry or category, the greater the responsibility of marketing to differentiate the offer from others in the category.
    

14. While the category is more promoted by competitors, more intelligent marketing investment is needed to achieve price premiums over competing brands.
    

15. The more substitutes in the category, the heavier investment in marketing for the brand.
    

16. The higher growth expectations in the corporation, the greater must be the marketing investment.
    

17. While higher is the installed capacity, the greater of the marketing investment.
    

18. The more immature the category or the state of consumption, the greater investment in marketing. To measure the return on marketing investment, ROMI is used, which allows prior knowledge (and as budget for the Marketing Manager) breakeven investment and payback of them. At the end of the fiscal period, can be measured ROMI and take action with these results. In the way that marketing investment is restricted, the chances of gaining an advantage over competitors are reduced. Each point previously treated (if not given the investment) brings delay or eliminate the chances of achieving advantage for the brand.