The Marketing Book 5th Edition

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Diminishing

returns set in

for additional

Less than expenditure

critical mass

expenditure

EFFECTIVENESS OF EXPENDITURE

MARKETING EXPENDITURE

Controlling marketing and the measurement of marketing effectiveness 521

effectiveness would be largely unaffected but
the financial return could be improved
significantly.
As already mentioned, the required level
of marketing expenditure must be assessed by
reference to competitive levels of activity. One
quite simple and increasingly common rela-
tionship can give assistance here, although it
does not provide a complete solution to what is
a complex area. The relationship is between the
proportionate share of the total marketing
expenditure spent by the company’s brand (i.e.
its share of voice, SOV) compared with the

relative share of market achieved by the brand

(i.e. its value market share, SOM). As shown in

Table 20.3, the ratio of SOV/SOM can be

greater than 1, equal to 1, or less than 1.

If a brand is proportionately outspending

its share of market (i.e. SOV/SOM > 1), then

the company is investing in developing the

attributes of the brand. This investment

should have been rigorously financially eval-

uated before commitment and should be con-

trolled by monitoring changes in the brand

attributes. Once the brand has been fully

developed, the marketing support should be

Figure 20.7 Relationship of marketing expenditure and effectiveness

Table 20.3 Share of voice (SOV) compared to share of market (SOM)

SOV

SOM

1➩ A development/investment strategy

SOV

SOM

=1➩ A maintenance/holding strategy

SOV

SOM

<1➩ Normally a cash/profit extracting strategy