visual quieting - at what point does marketing start to work against itself
The increasing price of consumer goods is largely due to marketing and delivery costs. Companies have learned that marketing pays off, especially once they reach the global scale. This cost effectiveness of marketing is what feeds the increasingly overwhelming clutter of billboards, print and other materials we face every day.
At what point is enough enough? Does brand awareness ever get sufficient that marketing budgets can be safely trimmed back, optimized so that companies start to become more responsible about the "cultural noise" they are creating.
Nike running shoes, for example, could cost substantially less if you bought them direct online from Nike. And I don't need to see another Nike ad for at least several years.
So, for example, take Nike's own numbers:
--
Consumer pays: $90
Retailer pays: $45 to NIKE, and then doubles the price for retail.
NIKE pays: $22.50 and then doubles the price to retailers for shipping, insurance, duties, R&D, marketing, sales, administration and profits.
The $22.50 price paid the factory includes: Materials: $14.60; Labor: $3.37; Overhead: $3.41; Factory Profit: $1.12; Total Costs: $22.50
[ source ]
--
and get rid of the retailer and the marketing:
Consumer pays: 33.00 direct to Nike
This eliminates the retailer (disintermediation) and much marketing so the price comes down to somewhere between 22.50 and 45.00... split the difference. This also opens room up so people assembling the shoes could be paid better, Labor is a pitiably small portion of the cost of production according to the document above. How much sense does that make?
At what point is enough enough? Does brand awareness ever get sufficient that marketing budgets can be safely trimmed back, optimized so that companies start to become more responsible about the "cultural noise" they are creating.
Nike running shoes, for example, could cost substantially less if you bought them direct online from Nike. And I don't need to see another Nike ad for at least several years.
So, for example, take Nike's own numbers:
--
Consumer pays: $90
Retailer pays: $45 to NIKE, and then doubles the price for retail.
NIKE pays: $22.50 and then doubles the price to retailers for shipping, insurance, duties, R&D, marketing, sales, administration and profits.
The $22.50 price paid the factory includes: Materials: $14.60; Labor: $3.37; Overhead: $3.41; Factory Profit: $1.12; Total Costs: $22.50
[ source ]
--
and get rid of the retailer and the marketing:
Consumer pays: 33.00 direct to Nike
This eliminates the retailer (disintermediation) and much marketing so the price comes down to somewhere between 22.50 and 45.00... split the difference. This also opens room up so people assembling the shoes could be paid better, Labor is a pitiably small portion of the cost of production according to the document above. How much sense does that make?
Labels: marketing, media economics, visual quieting
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