Marketing is an expense​; Investment​ is in becoming Marketable

Case 1: A newly created brand in a fast-growing category has lost 6 months of sales because the management is not ready to spend on “Marketing” just yet. They want to see some “results” first. To put the potential cost in perspective, it’s about 1% of the cost of creating the product, and making it market ready. Why would someone spend to make a product market ready, and then not spend to actually market it?

Case 2: There is another brand I know of that spends lavishly on media, while cutting corners on the cost of creating “brand content” being put out there via the media. Money spent in “making themselves marketable”, is far below the amount spent on media outreach. No wonder then, the media spend doesn’t really deliver any bang for the buck.

These counterintuitive decisions point towards a deeper lack of clarity about whether one should consider Marketing as an investment or an expense. It might seem like one of those eternal debates; but it need not really be. Once the product has been created, cost of Marketing it can be sliced into 2 fundamental parts – spend needed to make the product marketable and spend on reaching out to the market; the cost of engaging consumers through various media vehicles. Part 1 is called Brand Creation, and part 2, Brand Building.

Here is something all business leaders and owners need to understand. There is no clear line dividing Product Creation – Brand Creation – Brand Building; the 3 phases that encompass all Marketing. These are all essentially Marketing investments that must seamlessly align with each other. However, its necessary to ensure that each bucket helps other buckets deliver their best. Yes, it’s a challenge, but it becomes simpler when we deeply understand the value each of these cost heads bring to the table.

Let’s simplify these cost heads –

1. Product Creation: The cost of developing a new product through R&D, sourcing and innovation is the heart of any business. This includes raw material and packaging material development. Packaging is often an augmented product. There’s no point cutting corners here. There’s no business without a product. These spends are the pivot around which rest of the business decisions evolve. Your revenue projections, target audience, pricing, distribution, scalability, media choices etc. all depend on what exactly is your product.
2. Product~~BRAND~~Content Zone: The next cost head is more of a zone; the Brand zone. This is a clear and well-defined core, with vague boundaries. Cost allocated to this zone is the biggest investment you can make to ensure that the money spent on 1 and 3 gives desired results. I call it a ZONE because it extends seamlessly from product into messages; from industrial design to human design; from passion of the founder to the tone of voice for the customer; from form to visuals, sounds and sensorials. Put together we can call it the “Brand”, expressed as “Content”. This is what creates the force, the ether, the spirit; the all-encompassing black matter that surrounds your business without you ever realising it. You could leave this force field weak if you take it lightly. But if you create high quality content for your brand, you ensure that rest of the marketing comes easy. This is the best investment one can make to ensure that the business is on sound footing.
3. Media (Paid, Earned, Owned): This is the most visible and talked about investment, although some of it doesn’t cost you a penny these days. Traditionally, this is what makes marketing expensive. But let’s be clear, this is NOT necessarily what makes marketing effective. This spend is large enough to kill businesses even if they have got the product spot on. Startups who have rushed into media spend know what I mean.

In the above construct, Step 2 and 3 are Marketing spends. Extent of effort and money one invests on 2, decides how effective 3 is; and it ensures that the vision and passion behind Step 1 comes to life. Marketing is a cost from a media lens. But the part of marketing that ensures that your core product/service becomes marketable, is pure investment. The kind that makes businesses succeed; or fail.

In sum, investing in making yourself marketable is more critical than investing in marketing. Whatever effort and resources you put behind marketing and media, must be done only when the best possible Product~~BRAND~~Content zone is ready.

The views and opinions published here belong to the author and do not necessarily reflect the views and opinions of the publisher.

Vivek Chaturvedi

Associate Director, Brand Marketing at Tupperware India

Vivek Chaturvedi is a believer in purpose driven businesses and brands. Where profit is a consequence of excellence in pursuing the purpose; not merely the end goal of it. A brand strategist with experience in FMCG marketing and brand consulting. Learning and applying digital marketing since 2016

Expertise : Research & Analysis | Business Planning | Marketing Management | Agency Management
Talent : Brand Creation | Conceptualisation | Writing