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Establishing Your Marketing Investment Part Four

by Mark Levit

Prior articles in our Budgeting Library covered the most common budgeting exercise, competitive position and market environment and new product activity.

Here, we present another of our ten budgeting rules or, Budgeting Dicta.

The next consideration to make when budgeting is your brand’s
Market Growth

BUDGET DICTUM 3: The faster the market is growing, the higher the marketing investment.

In rapidly growing markets, marketers must invest substantially more than in mature markets where buyers are familiar with suppliers and have established relationships. Consider the difference in marketing investment made in microchips as opposed to machine tools.

In some cases, the fast-growth market may also be a new and innovative one. The product’s features may not yet be well known to prospective buyers.  A special initiative is required to educate them to overcome buying resistance caused by skepticism, high switching costs, or sheer inertia. This initiative requires a higher marketing investment.

If you’d like to discuss the budgeting cycle and how to plan for it, contact our Managing Partner, Mark Levit at 212.696.1200 now.

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