Daily we're asked what it might cost to take a specific product or service to market. "We've heard we should spend 1% of our gross sales on advertising and marketing is that right?." Or "We've got $150,000 to take this product to market is that enough?"
The correct answer, in both cases, is, "No."
The real question should be, "My target market is made up of 'X' people, households, users (you can fill in the blank) can I reach them with $150,000?"
Then the answer is, "Maybe".
Here is what I'm driving at: One of the indicators of "how much" to spend often depends on "how deep" is the market. Here's a great example:
Let's say I want to sell big time grain handling machinery. I know there are 2.2 million farms in the United States. Of those 600,000 are raising grain. Of that 600,000 there are 400,000 farms raising corn and soybeans. Of that 400,000 there are 150,000 that farm 2,000 acres or more. That becomes my market depth.
Let's say I want to sell a new ATV line. These all terrain vehicles are going to be, primarily, sold into the rural lifestyle market. However, there are 39 million households living on 2 - 200 acres. That becomes a much larger demographic...hence my advertising depth is deeper...and my marketing/advertising costs will increase.
Simply put, the company selling grain handling products to 150,000 farms will usually have a lower advertising/marketing cost than the ATV folks selling to nearly 40 million households.
Now look at your product or service is it a niche item or service or is it more broad based? That can be the start of making some budget plans. the bottom line is...you need to know your market, first.
Thanks to my friend Drew McLellan for the thought starter. (The Magic Marketing Bullet Does Not Exist!) I told him I'd give him props for tickling my gray matter (or was that gray hair?).
Michael P. Libbie - Insight Advertising, Marketing & Communications where we realize each market is different and there, along with no "magic bullet", is no "cookie cutter" answer. However, knowing always trumps guessing. www.InsightCubed.com