such as trade shows and advertising
with distributors, etc. A large part of
the trade budget goes directly to retailers. These marketing or sales “fees” are
accepted as the cost of doing business
with retailers and distributors, but
whether they have any true marketing
value is debatable. In fact, several of
them, including unauthorized deductions, retailer fees and distributor fees,
are often referred to as “nonworking”
marketing expenses.
Regarding the consumer side, the
majority of companies surveyed spend
less than $100,000 a year on their consumer marketing. In fact, almost half
of the companies spend less than
$50,000, and when you break it down
by company size, you see the disadvantage inherent in being a smaller company.
• The majority of small companies
spend less than $10,000.
• The majority of midsize companies
spend between $10,000 and
$250,000.
• The majority of large companies
spend between $500,000 and
$10,000,000.
However you slice it, there is usually
not enough money slotted for marketing, especially when considering the
major challenges that organic and natural companies face such as awareness
and confusion.
Marketing budgets are on the rise,
however. Almost half of the marketing
decision makers said they would be in-
creasing their marketing budgets for
this year. It appears that bigger compa-
nies are investing in marketing to get
even bigger, while smaller companies
plan on being more conservative with
their marketing budgets. Only 25 per-
cent of large companies are going to
stay the course with their current mar-
keting budgets, compared with 30 per-
cent of midsize companies and 35
percent of small companies. When you
do the math, a 10 percent increase of
the $10,000 budget of a typical small
company is only $1,000, while a 10 per-
cent increase of a $1 million budget is $100,000. The former might buy one small
advertisement in a magazine, while the latter may be enough to finance a cam-
paign or take an existing campaign to a whole new level.
Top 10 Marketing Tactics
With tight budgets and a multitude of marketing options, natural products
companies need to be careful where they spend their dollars. The Benchmark Report presented 34 tactics and asked marketing decision makers to rank them in
terms of use (Figure 5). What was found is that the natural products industry has
one foot in online marketing and the other in traditional forms of marketing.
