By Oluwole Dada
There is an uncomfortable conversation that happens in organisations between the finance and marketing teams. The product development team has done their work with sound formulation, attractive packaging, with corresponding pricing and a distribution plan. Then, at the final hurdle before launch, the finance director announces that the marketing allocation is cut. The team goes ahead to launch the product, allocate a shelf space and the sales team makes their calls. However, the consumer who has never heard of the product, nor received any communication about it or why it should matter to him, encounters it for the first time on a shelf full of products that have been speaking to him for years decides to walk past it.
Inadequate marketing budget is one of the most reliably fatal decisions an organisation can make at any point in a product’s life cycle. This isn’t because marketing spend is the only determinant of a product’s success. However, we have established across this series that product quality, pricing, distribution, cultural relevance, and after-sales infrastructure play critical roles. One important fact to note is that without adequate marketing investment, none of those other elements can function.
A product the consumer doesn’t know about cannot be chosen. A product whose benefits hasn’t been communicated cannot be preferred. A product that has no presence in the consumer’s mind before the purchase decision cannot compete with the products that do.
Marketing and sales aren’t parallel functions serving different masters. They are sequential stages in the same commercial journey and the sequence matters enormously. Marketing creates awareness. Awareness creates consideration. Consideration creates trial. Trial, when the product delivers on its promise, creates repeat purchase.
And repeat purchase, sustained and multiplied across a growing consumer base, creates the commercial success that the organisation was investing toward. When you underfund any stage in that sequence, the stages that follow become structurally impaired. You cannot generate trial from consumers who are unaware neither can you generate repeat purchase from consumers who never tried the product.
Advertising and promotion are essential for the success of any product. I am a firm believer that the first marketing task for any product is to ensure its availability and visibility on the shelf. A product that cannot be found cannot be bought. Getting the product to the shelf, in the right channels, in the right location on the shelf, and facing the consumer correctly is foundational. Without it, nothing else works.
However, the word to every marketing director is that shelf presence is a tiny part of marketing. Advertising and promotion must never be ignored.
Trying to win the trade without marketing investment isn’t resourcefulness. It is commercial naivety. This is why bulk displays, town storming, market activations, and sampling exercises exist, not as optional additions to a marketing plan, but as the mechanisms through which a new product bridges the awareness gap that separates it from the established competition.
When a new product deploys a team of trained brand ambassadors into a high-traffic market, offering samples, explaining the product’s benefits, demonstrating its use, and engaging directly with the consumer at the point of potential trial, it is an investment and not a marketing luxury. It is the process of inserting the product into the consumer’s awareness at the precise moment when awareness can convert to action. It costs money.
Coca-Cola’s approach to marketing investment is worthy of note. This is because Coca-Cola’s marketing philosophy contains the most important single lesson that any organisation launching a new product or sustaining an existing one can internalise. Coca-Cola spends over $4 billion annually on advertising and promotion globally.
This is despite the fact that it is a known brand, consumed by hundreds of millions of people daily, and whose core recipe has remained unchanged for over a century. One would have expected a well-known product to have reduced his yearly marketing spend.
Coca-Cola doesn’t do this. The reason is because brand equity isn’t a fixed asset. It depreciates. The consumer’s awareness of your product, their preference for it, and their habit of reaching for it, require continuous investment to maintain. The moment an established brand reduces its marketing investment below the level required to sustain the consumer’s relationship with it, the relationship begins to erode. The lesson is particularly important during periods of commercial pressure.
When brands respond to financial constraints by substantially reducing or suspending advertising, they risk weakening the mental availability that keeps the brand accessible when consumers enter a buying situation. Ehrenberg-Bass research found that brands that stopped advertising experienced an average 16% decline in sales after one year, rising to 25% after two years and 36% after three years.
Oluwole Dada is the General Manager at SecureID Limited, Africa’s largest smart card manufacturing plant in Lagos, Nigeria.
