How Vendors Allocate Marketing Dollars

This paper addresses at a high level some of marketing’s most intriguing issues: How do marketers determine the resource allocation by brand, by country, by retailer and by marketing element.

• Most brand marketers and most retail category managers are focused on spending the funds allocated to them. This paper helps them understand the C-suite spending rationale determining what resources  ultimately trickle  down to the brand and then out to the retailer.

• The not so surprising conclusion is that management commits resources where returns are judged to be highest in the short term or of most strategic value long term.  For example, does the $250K spent on a TV spot on Dancing with the Stars have a +/- ROI vs.  a display  in Walmart or a  Kroger loyalty card mailing or a temporary price reduction allowance (a TPR) at Rite Aid.   From a shareholder’s perspective , the higher  ROI should win.

• The startling fact is that few top managers, brand managers or retail category managers have the discipline to prove the returns of their effort. This is the continuing shame of the marketing profession.