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Marketing: The Red Haired Stepchild Budget
January 17, 2008
“You take someone like Apple. They could spend $150 million to $200 million on a marketing campaign and not blink an eye. I sat there and watched someone propose a $20 million marketing campaign. And we just vomited all over him. Two days later, my CFO and I approved a $950 million research and development budget in about 15 minutes, but to spend $20 million on marketing. We just don’t know how to do that. It just drives us nuts. But we’re going to have to get over it.”
— Seagate Technology CEO Bill Watkins, Jan. 4, 2008, Wall Street Journal interview
With close to $10 billion in revenue, Seagate is more of a classic technology company as opposed to a CE company, but what Watkins said about marketing applies equally well to many (probably most) consumer electronics companies. When the sun goes down, most are run by engineering and/or financial managers to whom marketing is a black hole expense — an evil meant to be held down if not eliminated altogether.
There was a day when that worked — somewhere back in the early ’70s when CE products of all types met with what was then an almost insatiable demand. But no more. These days consumers all too often draw the line choosing not to buy new products simply because no one has told them what is new, better, etc. Very little said about the things they shouldn’t be able to live without.
There are a lot of things I don’t like about Apple, mostly centered around their Big Brother approach to business. That said, they do make great products and appear to get the need for equal parts product development, fiscally responsible spending and great marketing. Unfortunately, too much of CE doesn’t (get that) and while “Two Out of Three Ain’t Bad” made for a classic Meatloaf hit song, it just doesn’t cut it in CE given all this industry has to sell.
When it comes to marketing, those who haven’t seen the need in the past, who haven’t committed proper marketing budgets, will (hopefully) as Mr. Watkins suggests, just have to get over it.
Bill Matthies is the president of Coyote Insight (www.coyoteinsight.com) and can be reached at (714) 726-2901 or wmatthies@coyoteinsight.com. Visit the Coyote Blog.
Posted by Bill Matthies on January 17, 2008 | Comments (0)
