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Your Marketing Investment
Part Seven

By Mark Levit

Prior articles in this series have addressed establishing your marketing investment, the most common budgeting exercise, competitive position and market environment, new product activity, market growth, capacity utliziation and budgeting for low ticket items.  .

This article covers the seventh of our ten budgeting dicta, “Product Importance to The Customer”

BUDGET DICTUM 6: The lower the proportion a business’s category of products represents of a customer’s total purchases, the greater the advertising and sales promotion investment.

Research shows there is a strong relationship between the amounts a customer purchases of a product category and the level of marketing investment required to sell that product.

Greater levels of advertising are needed to sell fabricating equipment then candy bars.  Why?  Larger purchases tend to be bought less frequently are required to solve specific customers’ needs. Products representing less than 25% of a customer’s total purchases require higher media advertising and sales promotion investments.

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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