Ralph E. Grabowski marketing VP 57 Sunset Rock Road Andover MA 01810-4828 978-470-3930 http://marketing VP.com ralph@marketingVP.com Marketing Strategy: The Marketing Budget IEEE … … Entrepreneurs’ Network (ENET) Tuesday, March 6, 2007 Ralph Grabowski will illustrate how much effort goes into the fact-gathering, analytical front-end process to identify needs, customers, and opportunities. He will quantify that investment with unique data. Please join us The evening begins with an optional meal at Bertucci’s, 475 Winter …

How much Budget and staffing? How much investment to surface that Marketing and customer information? Too much investment means a waste of money -we could invest that in engineering. Too little investment portends business failure -either making products which customers don’t need or having the wrong strategy. So how much do we Budget for Marketing? The old budgeting models use the Sum of Marketing + Promoting + Selling as a percentage of sales. For example, the American Electronic Association (AEA) surveys and publishes this sum every year for a number of separate segments of the electronics industry. Electronic systems companies tend spend 25 to 30 percent of sales in Marketing, Promoting, and Selling. Similar surveys are available for other industries. I have five problems with the model: 1 -It does not separate out the Marketing investment. 2 -Time is not in the guideline. It does not say WHEN we make the Marketing investment 3 -Startups have no sales. Therefore, you would budget nothing for Marketing. 4 -It is called Expense instead of INVESTMENT . 5 -Industry average is mediocrity. I am not interested in mediocrity

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