A retreat in marketing spending was a course of action taken by many companies in the wake of the recession that unfolded in the past year. The response is not uncommon; if revenues fall expenses must be kept in check, including marketing expenditures. But, there comes a point in which companies must commit more resources for marketing to spur sales and enhance profits. More evidence of firms taking the plunge has emerged recently. The latest example comes from Del Monte Foods, which has announced it is increasing its marketing spending by up to 50%. Results of a commitment to greater marketing investments is appearing already as Del Monte posted net income of nearly $59 million in the most recent quarter, compared to a loss of $8 million for the same period last year.
If only it were so easy to follow a formula of spend more money, reap higher sales and profits. That is an oversimplification of what must be done. If more money is going to be spent on marketing, where should the dollars go? More consumer promotions? Search advertising? Social media? Strategic objectives must be in place before making plans to spend marketing dollars. Increasing marketing spend is not a strategy! The strategy resides in what can be done to advance a company and its brands. Once plans are developed to pursue these aims, then and only then should attention turn to refining the marketing budget. Otherwise, decisions on expenditures have little or no strategic basis.
Kudos to Del Monte for increasing its investments in an effort to further fuel its growth. The key is understanding how to appeal to customers in today's environment, then devising programs to reach them in an effort to win their trust and gain share of customer.
Marketing Daily - "Del Monte to Hike Marketing Spend by 40+%"
Labels: Del Monte Foods, Marketing Budgets, Marketing Strategy