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Subject:
Typical marketing-expense components & ratios in consumer electronics
Category: Business and Money > Advertising and Marketing Asked by: danob-ga List Price: $75.00 |
Posted:
08 Dec 2002 10:52 PST
Expires: 07 Jan 2003 10:52 PST Question ID: 121421 |
To help flesh out a business plan for an in-home monitoring platform for the elderly, I'd like to learn typical or average marketing costs (as a percent of revenues) for companies operating in the consumer electronics industry -- as well as a break out of component categories such as advertising, publicity, and promotion. Ideally, I'd like to be able to say something like "Companies in this field spend between A% and B% of their sales on marketing; of this, C% is allocated to advertising, D% is publicity, ..." Any information about media costs and channels would be valuable, as well. (I've found that annual reports and 10-K's don't provide the level of detail I need.) Relevant, comparable product types might be radar detectors, home medical devices, VCRs/PVRs, high-end answering/fax machines, and other specialized electronics -- from smaller rather than enormous companies. The device (base station and a couple of peripherals) would sell for between $500 and $1,000. I need to be able to document the sources of this information, too, in the business plan. Thanks for your help! |
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Subject:
Re: Typical marketing-expense components & ratios in consumer electronics
From: omnivorous-ga on 08 Dec 2002 14:23 PST |
Danob This is a classical problem for three reasons: * first, public financial reports typically don't provide the level of detail you're seeking, aggregating everything into "sales & marketing" expense. * second, companies have highly variable marketing expenses because they are trying to differentiate themselves via customers or channels. For example, Gateway's spending is directed through advertising and direct marketing to sell personal computers to homes and small businesses. IBM's PC doesn't have the large call center operation that Gateway does but the division spends its money to reach corporate buyers through a direct sales force and two-step distribution. And any of the Taiwanese OEMs of personal computers will minimize marketing and sales expense to remain profitable. * financial analysts do comparisons of consumer electronic firms, but only the largest of the multi-nationals. And there's a new twist this year: changes in FASB accounting rules require different handling of traditional marketing expenses such as rebates or in-store merchandising fees: IBM "New rules bring consumer and trade promotions to harsher light" (undated) http://www-1.ibm.com/services/strategy/e_strategy/print_tradepromos.html Sometimes there is good data on an industry segment because an active trade association, as is reflected in this Google Answer on the software industry: https://answers.google.com/answers/main?cmd=threadview&id=62345 In your case, the dominant organization is the Consumer Electronics Association (www.ce.org) and I'm not familiar with any comparative financial studies that they've done. Also, they tend to serve the large multi-national companies. There are some sources for comparative industry information, particularly Hoover's On-line service. Even without using the fee service, they provide a capsule on companies and an idea who the most-direct competitors are: http://www.hoovers.com/ A suggestion: choose several public companies with your revenue profile (such as Bose Corp., Harmann International, ATI, Logitech). Public financial information will be your baseline, and then use Google searches to seek out specific information on spending. As an example: Bose + "public relations" Bose + "advertising" As you do, you'll find a wide range of marketing/sales spending and can decide how to factor that into your business plan. Best regards, Omnivorous-GA |
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