Eli5 How does a huge sum of a company’s money used for marketing really help in the long run?
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Helps with money.
But you’ve got 2 different types. Brand marketing / corporate branding vs marketing. Brand marketing is meant to raise brand awareness and doesn’t directly make money. It’s not easy to quantify the results of return on spending and many companies spend very little. But it’s proven to work in the consumer facing goods space. When people are at the store and they need to buy a product, like say laundry detergent, people typically gravitate towards brands they have heard of before like Tide over brands they have not heard of like “Unkle Joe’s Washin’ Suds”. Having heard of it before builds trust in the mind of the buyer.
The other non-brand marketing is about quantifiable means of return on spending. Loyalty programs, mailers, discounts, campaigns, cold calls, mailing lists, infomercials, anything targetted and therefore more quantifiable.
Long run, the company that most effectively uses their marketing will grow quicker and have a better chance of raising capital, and becoming bigger and bigger until it rules us all. And in the end, that’s the ultimate goal of everything in life…
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