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Why do Marketers Spend Millions of Dollars on Marketing?

Whether it’s a brand fight between Coca-Cola and Pepsi or McDonald and KFC, brands spend millions of dollars on marketing to win the battle. Though there is no winning in the brand game, the fight is all about marketing your brand in a right manner. By means of strategic marketing, brands are able to hole a prominent position in the eyes of their targeted audience and are also able to win over a few customers of their competitor’s. However, the question is, it is necessary to create the hype of a product that is already available in the market? With regards to the SMEs, nominal marketing conducted on social media platforms can create outstanding results. So why do big brands pour millions of dollars just to stay visible in the eyes of the customers?

Spend Millions of Dollars

In this article, we will figure out why big brands spend millions of dollars on marketing even though their brands are already the talk of the town!

In 2013, McDonalds spent a staggering amount of $998 million on their brand advertising. The question is, what was their marketing philosophy? In an age where digital marketing has made it easy for the SMEs to promote their business for free or by investing minimum amount of money, do you think it is logical to pour millions of dollars on marketing the big brands?

Well apparently, the answer is no but if we do a little research, we might shake our heads in yes for investing in a million-dollar marketing. The marketing budget for any brand depends on the nature of the industry. For example, according to the CMO survey and Deloitte Digital, the Consumer Packaged Goods allocates the most marketing budget, which is 24%. The Energy Industry allocates the minimum budget on marketing that is 4% only (don’t think they need it anyway).

It is estimated that a number of companies have decreased their marketing budget since February 2012, from an average spending of 8.5 to 7.5 percent of the total revenue. However, there are some FMCG and technological giants that continuous to spend around 10% of their total revenue. The question still persists! Why?

In the period of the 90s, Steve Jobs changed the fate of Apple Inc. From being an extinct company, he made it the world’s leading technological brand with his hard work and determination. Steve Jobs, being a visionary leader played his cards right in marketing for the success of the brand and with his strong marketing strategies, he evolved the brand entirely.

Hence to make a brand successful the requirement of marketing is inexorable. Marketers are accustomed to the fact that marketing is required at every phase of the product, whether its introduction, growth, maturity or decline. Companies spend a considerable amount of percentage from their annual revenue and regard it as an investment on different types of marketing. Here are four logical reasons why big brands readily spend on marketing, despite them being in-demand already.

1.  Conveying the Message of Continuous Improvement:

The brand image is already formed after a few years in the marker. However, ongoing marketing helps in building the reputation that you are taking measures of improving your product’s quality on continuous basis. Timely marketing helps in providing a convincing message that additional features are being added for customer’s satisfaction, along with awareness about promotional offers and by advertising in strategic ways, the marketers are able to change the perception of their audience.

2. Increasing Customers Base:

The major aim to market the product is to increase the customers’ base. During a period of time, the product evolves and to target the right audience and to keep them “hooked” to your brand, it is vital to utilize the marketing tools. The more visually appealing your message is, the more you will able to capture your audience and that requires a hefty amount of investment.

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Recommended Read: How to Use the Power of ‘Social Proof’ to Attract Customers

3. Getting Multiple Options:

There are sub-classes in targeted audience and by continuous marketing, you are able to focus on different categories because there are no such things as having just enough business! Via marketing, big brands are able to create a massive demand for what they have to offer and enjoy the situation.

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4. Securing the Future of the Company:

The Leading brand of today can become the extinct of tomorrow. In order to avoid the situation of losing the brand appeal, big brands engage in active marketing throughout the year or harvest in seasonal marketing that helps them in getting profitable returns.

Generally, big companies advertise their brands on TV, radio, billboards because they are able to capture a large number of audiences in a customized manner. The main objective of pouring massive number of dollars is to generate leads and they are able to achieve their targets, tremendously!

Hence, this is the reason why McDonalds paid a staggering amount for marketing, i.e., to increase the relationship with their customers, which will ultimately increases their turnover rate. The saying “out of sight, out of mind” is commonly repeated among marketers and this is the reason why they keep making strategies to promote their brands in such a way that they are able retain their customers and attract the new ones.

It is often said that a brain demands what a person sees, feels or hears on a regular basis. This is the reason why we tend to purchase the products that are advertised frequently and forget the ones that are not displayed recurrently. Big brands have a yearly turnover rate in billions of dollars and to keep the profit coming, they strategize their marketing in a very effective manner.

Among the big spenders in advertising, Pampers (the fourth leading brand) score the first position in marketing. By means of their strategic marketing, marketers are able to engage their customers and gain a leading position for their brands. However, it should be noted that marketing does not guarantee a specific lead generation, but it does serve massively as a reminder for a large number of audiences.

Big brands continue to increase their outdoor advertising spend because it helps them achieve their objectives, which includes communicating with their customers. This is one of the reason that sets them apart from their competitors and thus spending a hefty amount of money justifies their goals. Surely, these big brands utilize the social platform for their marketing purpose in their own creative manner. However, to connect with their audience, they keenly use the traditional media to gain impressive monetary returns.

The Conclusion:

The reason why big brands are successful is not just because of the quality of their products, it’s because of the way they are conveying their brands in the market. The whole idea is to convey the product in such a manner that the targeted audience is compelled to buy even if there are numerous options available in the market that are of lower prices or better quality. There are several reasons why the top brands invest in marketing and that includes retaining their customers by constantly advertising their products in a very vigilant manner. Marketing tactics that portray customization for the customers’ needs get the best scores. So pouring in a hefty amount of money for marketing is a necessity.

Author Bio:

Caitlyn Seymoreis a dreamer. Other than having a Master’s degree in Marketing, she specializes in writing motivational blogs. Caitlyn Seymore has created great variations in the ASA citation generator. She owns a cat and loves spending time with her family.

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