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Sarah O'Leary

Sarah O'Leary

Posted: September 29, 2009 05:58 PM

If You Want Sales, Don't Discount Marketing

What's Your Reaction?

"You know, the first place to cut is marketing."

The devaluing of marketing seems an acceptable mantra during challenging economic times, as if strategies that promote sales are expendable sprinkles on top of the corporate cake. In truth, the lack of effective marketing destabilizes brands and can lead to dead silence at the register. The time to be committed to the consumer sell, from the corporate campus to Wall Street to Main Street, is even more critical when the financial climate is tenuous.

If you doubt the importance of consumer marketing, ask some simple questions: When consumers don't know about or care about a product/service, does it sell? If consumers know about a product yet no one is persuaded to buy it, does it sell? When the retailer doesn't support a product, will it move from shelf to shopping cart? Lastly, if a company doesn't want to invest in the sell, why would it bother producing it or should potential shareholders consider investing in it? No product sells itself. Without the support of targeted, strategic marketing, the best of corporate intentions may be wasted efforts.

Not always within the cross hairs of Wall Street analysts, a corporation's marketing initiatives are crucial when weighing the validity of potential investments in the company. It is imperative that marketing plans be consistently scrutinized by seasoned experts. Like most other professions, smart marketers can see the strengths and limitations of fellow marketers' plans. This understanding is tantamount to successful analysis, and the need for such expertise should not be taken lightly.

Analyzing marketing strategy is a not a trip to the shallow end, but a deep dive by trained professionals. The questions asked by investors and shareholders must go beyond who is the new CMO or what will be the next hot ad campaign. It's not simply the percentages of spend in general terms, nor is it just past results and a broad stroke glimpse into the future. It's a constant, comprehensive study, not something that simply needs to be considered at quarterly or annual meetings.

If a publicly traded corporation loses a factory to fire, stock prices would fall accordingly. However, if a corporation wastes $100 million on a bad ad campaign, average investors may not realize it because of the way information is presented to them. It is, most certainly, difficult to quantify many forms of advertising and marketing. However, it is not impossible to measure a great deal of it. Expert vigilance is key to successful investment, as it is critical to protecting the investor's profit.

At the beginning of the Recession, I spoke with an old friend who was working on the marketing business for a publicly traded cruise line. One of the cruise line leaders, citing the economy and his personal perspective regarding the expendability of advertising and promotion, canceled all of the line's advertising and promotional efforts. He was convinced, it seemed, that the company would magically generate sales with even less support than the lean initiatives that had been in place. Instead, the strategy (or lack there of) severed much of the company's exposure in the marketplace and arguably cost the company sales in an already tough economy. Surprisingly, no one seemed to question of the move. Most likely, it was because no one on Wall Street or those holding shares even knew the move was made.

You don't need to be an economic scholar to understand the basics of supply and demand. If a consumer product falls in the retail forest and no one cares, the register won't make a sound. And in this economy, we need to make as much smart noise as possible.

 
 

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