1. Describe trends in marketing expenditures. What factors are driving these trends?
2. What percentage of sales should a business devote to marketing? Discuss the factors used in this decision.
Marketing is expensive! A 30-second advertising spot during the 2012 Super Bowl cost $3.5 million, and that doesn't include the $500,000 or more to produce the commercial. Anheuser-Busch usually purchases multiple spots each year. Similarly, sponsoring one car during one NASCAR race costs $500,000. But Sprint, the sponsor of the popular Sprint Cup, pays much more than that. And what marketer sponsors only one car for only one race? Want customers to order your product by phone? That will cost you $8 to $13 per order. Or how about a sales representative calling on customers that costs about $100 per sales call, and that's if the rep doesn't have to get on an airplane and stay in a hotel, which can be very costly considering some companies have thousands of sales reps calling on thousands of customers. And what about the $1-off coupon for Tropicana orange juice that you got in the Sunday newspaper? It costs Tropicana more than a $1 when you redeem it at the store. These are all examples of just one marketing element-promotion. Marketing costs also include the costs of product research and development, the costs of distributing products to buyers, and the costs of all the employees working in marketing.