How Much Should A Manufacturer Invest in Marketing?
It varies. But here’s how to start thinking about it.
Marketing typically drives revenue rather than the reverse in most successful businesses.
Marketing budgets can range from 0 to 40 percent of a company’s revenue, but what is right for your manufacturing company depends on your business.
Setting the marketing budget is daunting for any company because there are so many ways to approach the task.
Percentage of gross revenue is one of the more favored methods because it allows you to fluctuate your spending with your revenue.
The U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing if your total sales are less than $5 million.
The 2017 CMO Survey, sponsored by the Fuqua School of Business at Duke University, Deloitte LLP, and the American Marketing Association, revealed that marketing budgets as a percentage of overall revenue is 7.5 percent.
Consumer packaged goods companies allocate by far the largest percent of total company budget to marketing (nearly one quarter), followed by consumer services, tech software/biotech, communications/media, and mining/construction.
Companies that spend the smallest portion of their budgets on marketing include transportation, manufacturing, and energy.
Chapter 9 — Manufacturers: Getting Started with Modern Lead Generation
- Executive Summary — Are you a manufacturer looking for more qualified leads?
- Chapter 1 — The World Is Flat — Worldwide Manufacturing Trends
- Chapter 2 — How A Manufacturer Can Grow in A Flat Market
- Chapter 3 — Why Traditional Sales and Marketing Is Less Effective for Manufacturers
- Chapter 4 — The New Rules of Sales and Marketing for Manufacturers
- Chapter 5 — How A Manufacturer Can Be Known, Liked, Trusted and Preferred
- Chapter 6 — Manufacturers Have a Product Problem
- Chapter 7 — Manufacturing: Selling Through A Distributor
- Chapter 8 — How Much Should A Manufacturer Invest in Marketing?
- Chapter 9 — Manufacturers: Getting Started with Modern Lead Generation
